Australia’s South32 posts 18% jump in half-year profit
The world’s largest manganese miner South32 Ltd on Thursday posted an 18 percent rise in half-year underlying profit as a surge in metallurgical coal output and stronger commodity prices helped boost its bottom-line.
Fortunes of the miner improved after production at its Illawarra Metallurgical Coal project which accounts for most, if not all, of South32’s coking coal output, ramped up during the second quarter.
South32 further raised its production forecast for full year 2019 for Illawarra by 7 percent.
The company, which was chipped off mining giant BHP Group in 2015, said its profit was also boosted by record ore production at its Australia Manganese operations, while higher average realised prices for its commodities during the half-year helped its sales revenue rise by about $300 million.
Recent floods in Queensland state where the Cannington mine is located has impacted rail lines, with a large stretch of track closed due to the floodwaters which submerged vast tracts of the outback.
The 1,000 km rail line which is used by South32 and other miners including Glencore and MMG Ltd for transport of the commodities is expected to be out of action for at least a month, according to analysts.
The miner maintained its outlook for its Cannington operations, but said it would be subject to a review after the company’s assessments on the impact of the flood on its logistics infrastructure.
South32 posted $642 million in underlying profit for the six months ended Dec. 31, compared with $544 million a year earlier.
Revenue for the six months rose 9 percent to $3.81 billion, from $3.49 billion a year ago.
South32 declared an interim dividend of 5.1 cents per share, up from 3.6 cents per share a year ago, and a special dividend of 1.7 cents per share.
(Reporting by Rashmi Ashok in Bengaluru Editing by Phil Berlowitz)