South32 cuts spending on assets as it seeks to save R2.8bn
The group is planning to save R2.8bn over the next 15 months, mostly by cutting spending related to sustaining production
South32, a supplier of coal to Eskom, intends to save $160m (R2.8bn) over the next 15 months by reducing exploration and spending on its assets due to the uncertainty caused by Covid-19.
Spending on capital related to sustaining production is expected to fall 10% in the group’s year to end-June, and 18% in its 2021 financial year, with the miner also delaying planned share buybacks.
“We will continue to review the evolving environment, to understand the impact on timelines for our development options and will take further action as required to prioritise long term value across the group,” the miner said.
The group said its balance sheet remained healthy, with reported net cash of $277m as of the end of December, including cash and cash equivalents of $1.4bn, no term debt and an undrawn $1.5bn revolving credit facility.
South32 has a market capitalisation of R99.3bn, and its share price has fallen 23.32% so far in 2020. The JSE’s all share index has fallen 21% over the same period of time.