South32 profit soars on recovery in commodity prices

Underlying earnings for the half-year ended Dec. 31 came in at $1.00 billion, beating a consensus estimate of $987.5 million from 10 analysts compiled by research firm Vuma Financial.

“We are well positioned to capitalise on current market conditions as countries continue their economic recovery from covid-19, and … invest in new infrastructure that is expected to see continued growth in demand for the metals critical for a low carbon future,” said Chief Executive Officer Graham Kerr.

South32, the world’s No.1 manganese producer, said it would expand its capital management program by $110 million to $2.1 billion, leaving $302 million to be returned to shareholders.

But the miner lowered its output forecast for metallurgical coal by 7% and 1% for fiscal 2022 and 2023, respectively, due to additional longwall work at its flagship Illawarra mine and the impact of pandemic-induced movement curbs.

Australian miners faced disruptions last year from labour shortages caused by the restrictions, but the reopening of borders next week has raised hopes that the pressure would ease.

Perth-based South32 declared an interim dividend of 8.7 cents per share, up from 1.4 cents apiece a year ago.