South32 shares fall after it announces decline in profit
South32’s share price fell 6.7% to R32.61 on Thursday morning after it reported a 12% decline in interim after-tax profit to $543m.
The share price fell despite the company effectively more than doubling its interim dividend. The South African and Australian mining operations were unbundled from BHP in 2015.
South32 declared a 4.3 US cent interim plus a 3c special dividend, taking its total for the six months to end-December to 7.3c from 3.6c in the matching period.
The mining group grew interim revenue by 8% to $3.5bn.
"After a challenging start to the 2018 financial year, production for the majority of our operations is tracking on or ahead of schedule," South32 CEO Graham Kerr said in the results statement.
"We achieved record production at Australia Manganese and Mozal Aluminium, increased production guidance at SA Manganese in response to favourable market conditions, and delivered a 23% increase in payable nickel production at Cerro Matoso as ore grades improved."
The group announced in November that it intended to dispose of its South African collieries.
"We also announced a R4.3bn investment in the Klipspruit colliery, which will extend its life by approximately 20 years, and our decision to manage South Africa Energy Coal as a standalone business to sustainably improve its financial performance," Kerr said.
"This major strategic initiative will also allow us to transform the ownership of SA Energy Coal, consolidate our functions and further reduce duplication."