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Highlights

  • South32 is a globally diversified metals and mining company with operations in Australia, Southern Africa and South America
  • The Vanguard Group, Inc. has the maximum stake in S32 with a shareholding of approximately 5.18%
  • In FY23, the company recorded growth in annual production in aluminium, manganese and copper

South32 Limited (ASX: S32) is a diversified metals and mining company that produces commodities including alumina, bauxite, copper, aluminium, silver, lead, zinc, metallurgical coal, nickel and manganese. The company operates in Australia, Southern Africa and South America.

The ASX-listed firm reported annual growth in production for manganese, copper and aluminium in the financial year 2023 (FY23), underpinned by investments in commodities for a low-carbon future.

Aluminium production grew by 14% to 1,133kt in FY23, driven by record production at Hillside Aluminium and benefits derived from investments in low-carbon aluminium capacity at Brazil Aluminium and Mozal Aluminium. Payable copper production surged by 179% to 70.7kt, while manganese ore production grew by 4% to 5,653kwmt in FY23. Manganese production was driven by record annual production registered by Australia and South Africa Manganese.

Key financial highlights

During the first half of FY23, the company registered a 7.74% YoY fall in revenue to USD 3,696 million. The company informed that lower average realized price for manganese, zinc, metallurgical coal and aluminium and lower sales volume at Worsley Alumina and Cannington impacted the revenue for the period.

Unfavourable movement in commodity prices resulted in a 39.1% fall in underlying EBIT to USD 922 million and a 33.62% YoY fall in net profit after tax to USD 685 million.

Here’s the historical financial trend of S32.

Top 10 shareholders of S32

The top 10 shareholders of S32 together hold around 21.36% shareholding in the company, while the top four shareholders have nearly 13.61% stake. The Vanguard Group, Inc. has the maximum stake in the company with a shareholding of ~5.18%, followed by BlackRock Institutional Trust Company, N.A., which holds ~3.35% stake in the company.

Recent business update

Through an ASX filing dated 24 July 2023, the company informed that its FY23 financial results would incorporate an impairment expense of around USD 1,300 million in relation to its Hermosa project. Following this impairment the carrying value of the project will be nearly USD 1,001 million as at 30 June 2023.

Outlook

In FY24, the company expects to deliver alumina production of 4,000kt from Worsley Alumina and 1,400kt from Brazil Alumina. The expected aluminium production in FY24 is 148kt from Brazil Alumina and 720kt from Hillside Aluminium.

S32 expects to register further production growth in base metals and aluminium in FY24, and its development options are expected to strengthen its long-term supply of critical minerals.

Share performance of S32

S32 shares closed 1.36% up at AUD 3.730 apiece on 22 August 2023 with a market capitalization of AUD 16.72 billion. With this, in the past 12 months, the share price has dropped by 9.83% and in the past six months, it has declined by 18.56%.

The 52-week high of S32 is AUD 4.87 recorded on 24 January 2023 and the 52-week low is AUD 3.515 recorded on 25 October 2022. The existing share price is 23.41% below its 52-week high.

 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, is 22 August 2023. The reference data in this report has been partly sourced from REFINITIV.