South32 Keeps Buyback Suspended, Makes Annual Loss
August 19 2020 - 7:30PM
Dow Jones News
By David Winning
SYDNEY--South32 Ltd. said its share buyback would remain
suspended but resolved to extend the program by 12 months as it
navigates a path through the coronavirus pandemic.
South32 reported a net loss of US$65 million for the 12 months
through June, compared to a profit of US$389 million a year ago.
The result reflected weaker realized prices for almost all of the
commodities that it digs up compared to the 2019 fiscal year. It
also booked impairment charges and restructuring charges totalling
US$94 million tied to a review of its manganese alloy smelters.
Underlying earnings before interest and taxes fell by 69% to
US$446 million.
Directors of the company declared a final dividend of 1.0 U.S.
cent a share, below the payout of 2.8 U.S. cents a year
earlier.
"While our on-market share buyback remains suspended with US$121
million remaining, it has been extended by 12 months to September
2021, giving us the flexibility to recommence the program as
Covid-19 related operational risks subside and our financial
performance improves," said Chief Executive Graham Kerr.
South32 had a mixed year of production, with alumina and
metallurgical coal output higher than in fiscal 2019, but output of
energy coal, nickel and manganese ore lower. Standout performers
included the Cannington silver-lead mine, which exceeded annual
guidance by 8%. The Brazil Alumina, Hillside Aluminium and
Australia Manganese ore divisions also had record production years
in fiscal 2020.
Earlier this month, South32 said it had agreed to the sale of
the TEMCO smelter in Australia to an entity within GFG Alliance for
a nominal payment. South32 and joint venture partner Anglo American
PLC will continue to supply ore to the smelter as part of the
deal.
The company has also mothballed its Metalloys manganese alloy
smelter in South Africa amid concern that it may not be economic
viable in future.
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
August 19, 2020 19:15 ET (23:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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