South32 shares firm after solid December quarter
Make us a preferred source
Make us a preferred source on Google
More news: Shares in South32 are up 1.5% to $3.53 in early trading on the ASX after the diversified miner lifted production across most of its commodities and maintained full-year production guidance.
Citi analysts said the result was reasonable strong and better than their expectations. Citi kept its 'neutral' rating on the stock and its valuation of $3.90 per share.
What they said: "Market should take strong DecQ production as a positive tempered by the higher cost guidance," the analysts said in a note.
South32 lifts production in December quarter, flags higher costs
The news: Mining giant South32 has lifted production for most of its commodities in the second quarter but has also flagged higher operating costs for the first half.
The numbers: Aluminium output rose 3% from the preceding quarter helped by a pickup in production from its Brazil aluminium and Mozal aluminium mines, while alumina production jumped 14% from improved plant availability.
Copper production was up 9%, but zinc output was down 11%. Manganese output jumped 88% for the quarter as its Australia manganese unit resumed production, but it was still down 38% for the first half.
The context: The company has maintained production guidance across all operations, apart from Mozal aluminium, where guidance was withdrawn in December 2024 due to civil unrest in Mozambique.
However, operating unit costs for the majority of its operations are expected to be higher, reflecting the impact of higher raw material input costs in its aluminium value chain.
The group expects operating unit costs in the second half to benefit from weaker producer currencies but said it will provide guidance at the time of its half-year results in February.
The source: ASX announcement
