A recovery in commodities prices and ongoing cost reductions have helped diversified miner South32 swing to a solid full-year profit.
A recovery in commodities prices and ongoing cost reductions have helped diversified miner South32 swing to a solid full-year profit.
The company reported net profit of $US1.23 billion ($A1.6 billion) for the year to June 30, compared with a $US1.6 billion loss a year ago.
Underlying earnings surged to $US1.15 billion from just $US138 million a year ago, while revenue was up 20 per cent to $US6.95 billion.
Chief executive Graham Kerr said the strong recovery had helped South32 more than triple free cash flow during the year.
"The combination of our high operating leverage and stronger commodity prices delivered a substantial increase in financial performance," he said.
South32 said higher average realised prices for its commodities increased revenue by $US1.89 billion, with metallurgical coal and manganese the main contributors.
The gains have come despite lower volumes, with the miner missing production guidance for several commodities for the financial year on account of bad weather and maintenance challenges.
The company also benefited from a $360 million reduction in costs during the year, mostly at its South African energy coal business and Worsley Alumina operations.
It expects to lift sustaining capital expenditure by around 40 per cent to $US430 million in the current financial year.
The strong cash flow and low debt on its books has allowed the company to sharply lift dividend and increase funds for share buybacks.
South32 declared a fully franked final dividend of US6.4 cents a share, taking full-year payout to 10 cents a share, up from just 1.0 cent last year.
It will also add a further $US250 million to a capital management program for share buybacks, taking it to $US750 million.
By 10am, shares in the company were up 3.6 per cent at $2.995 each in a higher Australian market.
