(Alliance News) - South32 Ltd on Thursday raised its dividend for the first half of its financial year, despite reporting a fall in profit and revenue due to weaker prices for its key commodities.
For the six months ended December 31, the Perth, Australia-based miner reported pretax profit at USD44 million, down 76% from USD187 million a year before, on revenue that declined 8.7% to USD2.94 billion from USD3.22 billion.
Metallurgical coal production in the first half was up 14% to 3.3 million tonnes, however the realised sales price dropped 31% to USD107 per tonne from USD154.
Total alumina production was up 3.8% at 2.7 million tonnes, but the average sales price achieved by Worsley Alumina dropped to USD278 per tonne from USD322, while the sales price for South32's Brazilian operations declined to USD277 per tonne from USD301.
Manganese alloy output dropped 44% year-on-year to 51,000 tonnes for the period. The sales price in Australia fell to USD958 per tonne from USD1,013. In South Africa, the average sales price fell to USD648 per tonne from USD935 the prior year.
Payable nickel production was down 22% year-on-year at 16,100 tonnes, while aluminium production remained flat 496,000 tonnes.
South32 declared an interim dividend of 1.4 US cents, up 27% from 1.1 cents the year before.
Looking ahead, the group has kept its current guidance for alumina, aluminium, and manganese production for its current financial year.
However, South32 increased guidance for metallurgical coal output by 4% to 8.00 million tonnes, and payable nickel production from Cerro Matoso in Colombia by 3% to 34,600 tonnes.
For energy coal in South Africa, for the first nine months of its financial year, output is expected to be between 15.00 and 16.40 million tonnes, amid a continued response to demand from state owned utility Eskom.
"During this period of volatility, we have focused on what we can control, delivering a strong operating result, including record production at Worsley Alumina, Brazil Alumina and Australia Manganese, supporting lower operating unit costs at the majority of our operations during the half," said Chief Executive Officer Graham Kerr.
"We are off to a strong start in 2021, as we continue to build on our recent operating performance. Our net cash has increased from USD275 million on 31 December to USD452 million at the end of January, and we are now seeing a rebound in demand from markets outside of China for some of our key commodities, that is underpinning a recovery in prices," Kerr added.
Shares in South32 were up 1.9% at 150.80 pence in London on Thursday, while its Johannesburg shares were 1.7% higher at ZAR30.55.
By Dayo Laniyan; dayolaniyan@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
South32 (S32)