APPENDIX 4D
SOUTH32 LIMITED
(ABN 84 093 732 597)
Results for announcement to the
market
This page and the
accompanying 63 pages comprise the half year end financial information given
to the Australian Securities Exchange (ASX) under Listing Rule
4.2A. This statement includes the unaudited consolidated results of
the South32 Group for the half year ended 31 December 2024 (H1
FY25) compared with the half year ended 31 December 2023 (H1
FY24).
The half year report should be
read in conjunction with the Financial Report for the year ended 30
June 2024. Figures in italics indicate that an adjustment has been
made since the financial information was previously
reported.
|
US$M
|
H1
FY25
|
H1
FY24
|
%
Change
|
|
Revenue from continuing
operations(a)
|
3,123
|
2,507
|
25%
|
|
Profit/(loss) after tax
attributable to members(1)
|
360
|
53
|
579%
|
|
Other financial
measures
|
|
Underlying
revenue(a)
|
3,850
|
3,881
|
(1%)
|
|
Underlying
earnings(2)(a)
|
375
|
40
|
838%
|
(a)
On 29 August 2024, South32 sold its shareholding in Illawarra
Metallurgical Coal to an entity owned by Golden Energy and
Resources Pte Ltd and M Resources Pty Ltd(3). As a
result, Illawarra Metallurgical Coal was classified as a
discontinued operation in the H1 FY25 and H1 FY24 restated results.
Our Group underlying financial measures include the financial
contribution from Illawarra Metallurgical Coal prior to its
sale.
Net tangible assets per
share
Net tangible assets per ordinary
share were US$1.99 as at 31 December 2024 (US$1.94 as at
30 June 2024)(4).
Dividends
The Board has resolved to pay an
interim dividend of US 3.4 cents per share (fully-franked) for the
half year ended 31 December 2024.
The record date for determining
entitlements to dividends is 7 March 2025; payment date is
3 April 2025.
FINANCIAL RESULTS AND
OUTLOOK
HALF YEAR ENDED 31 DECEMBER
2024
ASX / LSE / JSE Share Code: S32;
ADR: SOUHY
13 February 2025
South32 transforms portfolio, delivers earnings growth and
increases shareholder returns
"We delivered a strong start to
FY25, off the back of our improved operating performance and
transformed portfolio.
"The sale of Illawarra
Metallurgical Coal has unlocked significant value and streamlined
our portfolio to be focused on minerals
and metals critical to the world's energy transition. The sale has also simplified our business, lowered our
sustaining capital intensity and strengthened our balance sheet,
enabling us to self-fund our growth in zinc and
copper.
"We invested to grow our future
production during the period, as we continued construction of our
large-scale, long-life Taylor zinc-lead-silver project at Hermosa in Arizona, United States, and expanded
our pipeline of copper exploration options in highly prospective
regions.
"We achieved strong operating
results across our portfolio in H1 FY25, including increasing
aluminium production by 5 per cent and copper production by 16 per
cent. This enabled the Group to capitalise on improved commodity
prices, with Underlying EBITDA increasing by 44 per cent to US$1
billion in H1 FY25.
"FY25 production guidance remains
unchanged, except for Mozal Aluminium where we have updated
production guidance as we continue to mitigate the impact of civil
unrest in Mozambique. Our operating discipline and weaker producer
currencies are expected to support lower operating unit costs for
the majority of our guided operations in H2 FY25.
"Demonstrating our strong
financial position, track record of returning excess capital to
shareholders and positive outlook for the business, today we
announced a fully-franked interim ordinary dividend of US$154
million (US 3.4 cents per share) and the continuation of our
capital management program, with US$171 million remaining to be
returned to shareholders.
"We are focused on continuing our
strong operating performance into the second half, unlocking value
from our growth pipeline and continuing to reward shareholders as
our financial performance improves."
Graham Kerr, South32 CEO
Financial Highlights
|
US$M
|
H1
FY25
|
H1
FY24
|
%
Change
|
|
Revenue from continuing
operations(5)
|
3,123
|
2,507
|
25%
|
|
Operating profit/(loss) from
continuing operations(5)
|
520
|
(52)
|
N/A
|
|
Profit/(loss) after tax
|
359
|
53
|
577%
|
|
Profit/(loss) after tax
attributable to members(1)
|
360
|
53
|
579%
|
|
Basic earnings/(loss) per share
(US cents)(6)
|
8.0
|
1.2
|
567%
|
|
Ordinary dividends per share (US
cents)(7)
|
3.4
|
0.4
|
750%
|
|
Other financial
measures
|
|
|
|
|
Underlying
revenue(8)(9)
|
3,850
|
3,881
|
(1%)
|
|
Underlying
EBITDA(8)(10)
|
1,018
|
708
|
44%
|
|
Underlying EBITDA
margin(8)(11)
|
27.5%
|
19.0%
|
8.5%
|
|
Underlying
EBIT(8)(10)
|
663
|
236
|
181%
|
|
Underlying EBIT
margin(8)(12)
|
18.0%
|
6.1%
|
11.9%
|
|
Underlying
earnings(2)(8)(10)
|
375
|
40
|
838%
|
|
Basic Underlying earnings per
share (US cents)(6)(8)
|
8.3
|
0.9
|
822%
|
|
ROIC(8)(13)
|
9.0%
|
1.3%
|
7.7%
|
|
Ordinary shares on issue
(million)
|
4,517
|
4,529
|
(0.3%)
|
Safety performance
On 17 September 2024, Mr José Luis
Pérez was fatally injured in an incident at Cerro Matoso where he
was due to perform a scaffold maintenance task. Our deepest
sympathies remain with Mr Pérez's family and colleagues to whom we
are continuing to provide support. An investigation into the
incident was completed in Q2 FY25 and we are engaging with the
relevant authorities. Key learnings from the incident have been
shared across our organisation, and improvement actions are
underway.
We remain united by our belief
that everyone can go home safe and well every day. We continued to
implement our multi-year Safety Improvement Program during H1 FY25.
This includes our investment in safety leadership through our LEAD
Safely Every Day program which is being extended to frontline
employees, contractors that perform high-risk work at our
operations, and functional roles that support them.
Our LEAD Safely Every Day program
has supported measurable improvements in our safety performance,
with total recordable injury frequency (TRIF)(14) for H1
FY25 improving by 31% to 3.5 (FY24: 5.1), and lost time injury
frequency (LTIF)(15) reducing to 1.3 in H1 FY25 (FY24:
1.9). Our leading indicator, significant hazard
frequency(16), increased to 167.0 for H1 FY25 (FY24:
122.3), indicating improved hazard awareness and a positive
reporting culture.
Health and safety
performance
|
Performance metric
|
H1
FY25
|
FY24
|
|
Fatalities from health and safety
incidents
|
1
|
0
|
|
Total lost time injury frequency
(LTIF)
|
1.3
|
1.9
|
|
Total recordable injury frequency
(TRIF)
|
3.5
|
5.1
|
|
Total significant hazard
frequency
|
167.0
|
122.3
|
People and culture
An inclusive culture and diverse
workforce supports greater collaboration, innovation and
performance. Building and maintaining a workforce that represents
the communities in which we operate, especially recruiting more
women into operational roles, is an industry-wide challenge that we
are working to address.
We track our inclusion and
diversity performance against a series of measurable objectives as
described in the table below.
Inclusion and diversity
performance
|
Diversity representation
(%)
|
FY25 measurable
objective
|
H1
FY25
|
FY24
|
|
Women in our workforce
|
Achieve at least 23.0%
|
22.7
|
20.6
|
|
Women on our Board
|
Maintain at least 40%
|
55.6
|
50.0
|
|
Women in Lead Team
|
Maintain at least 40%
|
50.0
|
50.0
|
|
Women in leadership
roles(17)
|
Achieve at least 24.1%
|
23.4
|
23.6
|
|
Local workforce
diversity(18)
|
Achieve at least 4 of 5
metrics
|
3
|
N/A
|
Addressing climate
change
We have set a target to halve our
operational greenhouse gas (GHG) emissions
(Scope 1 and 2) by 2035(19), against our FY21
baseline(20)(21), and a long-term goal(22) to
achieve net zero GHG emissions across all scopes (Scope 1, 2 and 3)
by 2050. Our approach to climate change is focused on reshaping our
portfolio to commodities critical to a low-carbon future,
decarbonising our operations, working with others to decarbonise
the value chain, and understanding and responding to the potential
physical impacts of climate change.
Our second Climate Change Action
Plan, to be released in August 2025, will detail our approach and
the actions we are taking to address the risks and opportunities
that climate change presents for our business.
Our estimated operational GHG
emissions declined by 9% to 9.5Mt CO2-e in H1 FY25,
reflecting the sale of Illawarra Metallurgical Coal in August
2024.
Greenhouse gas
emissions
|
Million tonnes of CO2
equivalent
|
H1
FY25
|
H1
FY24
|
|
Operational GHG
emissions
|
9.5
|
10.4
|
Business performance
Aluminium value chain
Alumina
Alumina production declined by 2%
in H1 FY25 to 2.5Mt, as
improved plant availability at Brazil Alumina was offset by
constrained bauxite supply at Worsley Alumina due to delayed
approvals for new mining areas. FY25 production guidance remains unchanged at
5.1Mt.
Underlying EBITDA(23)
increased by US$364M to US$543M in H1 FY25, for an operating margin
of 41%, as a 53% increase in our average realised price of alumina
more than offset higher caustic soda costs at Worsley
Alumina.
Worsley Alumina has now received
primary State(24) and Federal(25)
environmental approvals for the Worsley Mine Development Project
(the Project). The Project will enable access to bauxite to sustain
production at Worsley Alumina, with mining of bauxite areas located
near our existing operations expected to commence in Q4 FY25. We
will now also commence the development of new mining areas that are
expected to sustain production to at least
FY36(26).
Aluminium
Aluminium production increased by
5% to 604kt in H1 FY25, as Hillside Aluminium continued to test its
maximum technical capacity, and low-carbon aluminium(27)
production from Brazil Aluminium and Mozal Aluminium increased by
12%.
FY25 production guidance for
Hillside Aluminium (720kt(28)) and Brazil Aluminium
(130kt) remains unchanged. FY25 production guidance for Mozal
Aluminium has been updated to 350kt(28) (previously
360kt(28)(29)), subject to further potential impacts of
civil unrest in Mozambique.
Underlying EBITDA(23)
increased by US$160M to US$136M in H1 FY25, for an operating margin
of 8%, as a 16% increase in our average realised price of aluminium
and lower smelter raw material input prices (coke and pitch), more
than offset higher alumina prices.
Base metals
Copper
Sierra Gorda payable copper
equivalent production(30) increased by 21% to 46.4kt in
H1 FY25, due to improved ore quality in the current
phase of the mine plan. FY25 production guidance
remains unchanged at 84.8kt payable copper equivalent (copper
70.0kt, molybdenum 1.3kt, gold 25.0koz and
silver 550koz).
Underlying EBITDA
increased by US$98M to US$215M in H1 FY25,
for an operating margin of 53%, due to higher average metals prices
and lower labour costs.
Sierra Gorda continued to invest
in studies and exploration to grow future copper production,
including a feasibility study for the fourth grinding line project
which has the potential to increase plant throughput by ~20% to
~58Mtpa (100% basis). The feasibility study and a final investment
decision by the joint venture partners is expected in H1
FY26.
Across our broader portfolio, we
invested US$18M in greenfield exploration programs in H1 FY25, as
we work to discover our next generation of base metals
mines.
We also expanded our pipeline of
copper exploration options in highly prospective regions. We
entered into a strategic alliance with Noronex Limited to explore
for copper in the Kalahari copper belt, Namibia, and acquired a
19.9% interest in American Eagle Gold Corp., which holds an option
to acquire a 100% interest in the Nakinilerak copper exploration
prospect in British Columbia, Canada.
Zinc
Cannington payable zinc equivalent
production(31) decreased by 17%
to 129.9kt in H1 FY25, as the operation managed increased
underground activity and complexity which is expected to continue
to drive variability in quarterly performance. FY25 production
guidance remains unchanged at 265.4kt payable zinc equivalent
(silver 11,300koz, lead 100.0kt and zinc 50.0kt).
Underlying EBITDA decreased by
US$17M to US$130M in H1 FY25, for an operating margin of 40%, as
higher average realised metal prices were more than offset by
additional mining costs to deliver planned underground
activity.
We invested US$248M at Hermosa in
H1 FY25, as we progressed construction of our large-scale,
long-life Taylor zinc-lead-silver project, which is expected to
deliver attractive returns over multiple decades(32) and
unlock value for future growth options at Hermosa.
These options include our Clark
battery-grade manganese deposit, where we progressed construction
of an exploration decline which will enable access to ore for
future demonstration scale production, and further underground
exploration.
We also directed US$16M to
capitalised exploration at Hermosa in H1 FY25 as we continued to
test the potential for a continuous copper system connecting the
Peake copper deposit(33) and Taylor Deeps.
Nickel
Cerro Matoso payable nickel
production increased by 1% to 18.5kt in H1
FY25. FY25 production guidance remains unchanged at
35.0kt.
Underlying EBITDA increased by
US$22M to US$39M in H1 FY25, for an operating margin of 16%, as the
realisation of cost efficiencies, lower price-linked royalties and
a weaker Colombian peso, more than offset local inflationary
pressures.
In Q2 FY24, we commenced a
strategic review of Cerro Matoso in response to structural changes
in the nickel market that have placed pressure on both nickel
prices and discounts for our ferronickel product. While the
strategic review has identified improvement options that have the
potential to enhance the operation's competitive position, the
expected returns from these investments do not currently support
the allocation of capital in accordance with our capital management
framework and strategy. As a result, we have commenced a process to
investigate the potential divestment of Cerro Matoso. In parallel,
we will continue to target further cost efficiencies to mitigate
the impact of lower planned nickel grades in accordance with the
mine plan.
Manganese
Australia Manganese
Australia Manganese continued to
implement its operational recovery plan following the impact of
Tropical Cyclone Megan in Q3 FY24.
A substantial dewatering program
continued during H1 FY25, which has enabled access to certain
mining pits and a phased restart of mining activities. Production
from the primary concentrator resumed in Q2 FY25 with saleable
production of 639kwmt. FY25 production guidance
remains unchanged at 1,000kwmt, with production expected to
continue at limited rates in H2 FY25.
We also progressed the demolition
of undersea structures and commenced installing pilings for the new
wharf. While we have experienced some
weather related delays, we are looking to mitigate these through
pilings installation productivity improvements.
Subject to further potential
impacts from the wet season, export sales
are expected to progressively increase over Q4 FY25.
Capital expenditure was US$47M in
H1 FY25 and guidance remains unchanged at US$125M in FY25 as we
invest in infrastructure to deliver the operational recovery
plan.
Australia Manganese has received
external insurance payments of US$250M (100% basis) to
date(34). We continue to work with our insurers to
assess the timing and value of further recoveries in relation to
the impact of Tropical Cyclone Megan.
Underlying EBITDA was a loss of
US$31M in H1 FY25 due to the impact of Tropical Cyclone Megan.
Separately, we incurred idle capacity and other remediation costs
of US$74M that were excluded from Underlying EBITDA as an earnings
adjustment.
South Africa Manganese
South Africa Manganese production
decreased by 3% to 1,082kwmt in H1 FY25, as we reduced our use of
higher cost trucking and undertook a temporary shut at our Wessels
mine in Q2 FY25, in response to market conditions. While FY25
production guidance remains unchanged at 2,000kwmt, we will
continue to monitor and respond to market conditions.
Underlying EBITDA(23)
increased by US$14M to US$28M in H1 FY25, for an operating margin
of 15%, as higher average realised manganese prices, more than
offset a stronger South African rand and local inflationary
pressures.
Financial performance
Profit and Loss
The Group's profit after tax
attributable to members(1) increased by US$307M to
US$360M in H1 FY25, as we delivered strong operating results and
capitalised on improved commodity prices. Underlying
earnings(2) increased by US$335M to US$375M in H1 FY25.
A reconciliation of profit/(loss) to Underlying earnings is
set out on page 9.
Underlying EBITDA increased by
US$310M (or 44%) to US$1,018M, for a Group operating
margin(11) of 27.5% (H1 FY24: 19.0%). Our strong
financial results were driven by higher sales volumes of aluminium
and copper (+US$203M) and higher average commodity prices
(+US$627M), which more than offset lower contributions from
steel-making commodities following the sale of Illawarra
Metallurgical Coal (-US$80M) and the impact of Tropical Cyclone
Megan at Australia Manganese (-US$101M).
Underlying EBIT increased by
US$427M to US$663M in H1 FY25, as Underlying depreciation and
amortisation decreased by US$117M to US$355M following the sale of
Illawarra Metallurgical Coal and the temporary suspension of
operations at Australia Manganese.
Cash Flow
Group free cash flow from
operations, excluding equity accounted investments (EAIs), improved
by US$361M for an outflow of US$116M in H1 FY25, as a significant
increase in profitability, and lower sustaining capital expenditure
following the sale of Illawarra Metallurgical Coal, more than
offset our investment in growth at Hermosa.
Separately, we received net
distributions(35) of US$86M from our Sierra Gorda EAI in
H1 FY25 (H1 FY24:US$18M), and provided US$63M of funding to our
manganese EAI in H1 FY25 to support the operational recovery plan
at Australia Manganese.
Group capital expenditure,
excluding EAIs and exploration and intangibles, decreased by
US$110M to US$457M as lower sustaining capital expenditure
(-US$145M), more than offset an increase in growth capital
expenditure at Hermosa (+US$60M). We expect to invest US$895M in
Group capital expenditure, excluding EAIs and Illawarra
Metallurgical Coal, in FY25.
Capital expenditure for our
manganese EAI was US$72M in H1 FY25 and is expected to be US$170M
in FY25 as we continue our investment in infrastructure to deliver
the operational recovery plan at Australia Manganese.
Capital expenditure for our Sierra
Gorda EAI was US$106M in H1 FY25 and is expected to be US$210M in
FY25 as the operation continues deferred stripping activity and
progresses the feasibility study for the fourth grinding line
project.
We returned US$169M to
shareholders in H1 FY25, with US$140M in fully-franked ordinary
dividends in respect of H2 FY24, and US$29M via our on-market share
buy-back.
Balance Sheet
Group net debt decreased by
US$715M to US$47M in H1 FY25, as improved profitability, and the
sale of Illawarra Metallurgical Coal (+US$938M(36)),
more than offset our investment in growth at Hermosa (-US$248M) and
returns to shareholders (-US$169M).
Our strong financial position was
achieved despite a build in working capital of US$267M in H1 FY25,
predominantly due to an increase in inventories and elevated trade
receivables at period end due to higher commodity prices and the
timing of shipments in Q2 FY25.
Dividends and Capital
Management
Our unchanged capital management
framework supports investment in our business and rewards
shareholders as our financial performance improves. Consistent with
our policy to distribute a minimum 40% of Underlying earnings as
ordinary dividends, the Board has resolved to pay a fully-franked
interim ordinary dividend of US 3.4 cents per share (US$154M) in
respect of H1 FY25, representing 41% of Underlying
earnings.
Reflecting our strong financial
position and track record of returning excess capital to
shareholders, we will continue returns under our US$2.5B capital
management program via our on-market share buy-back in H2 FY25. Our
capital management program has US$171M remaining to be returned to
shareholders ahead of its extension or expiry on 12 September
2025(37).
Earnings reconciliation
The Group's profit after tax
attributable to members increased by US$307M to US$360M in H1 FY25.
Underlying earnings(2) increased by US$335M to US$375M
in H1 FY25.
Consistent with our accounting
policies, various items are excluded from the Group's profit/(loss)
to derive Underlying earnings. Total adjustments to derive
Underlying EBIT (US$143M), shown in the table below,
include:
|
-
|
Joint venture adjustments
(US$22M): to reconcile the equity accounting position to a
proportional consolidation basis for Sierra Gorda (+US$51M) and our
manganese EAI (-US$29M). For Australia Manganese, this included
adjustments for idle capacity and other remediation costs (+US$74M), and external insurance
recoveries (-US$150M) in relation to the impact of Tropical Cyclone
Megan;
|
|
-
|
Net loss on the disposal of
subsidiaries and joint operations (US$47M): recognition of loss on
disposal of Illawarra Metallurgical Coal, which had been previously
recognised as a discontinued operation in FY24;
|
|
-
|
Net impairment loss of financial
assets (US$71M): periodic revaluation of the shareholder loan
receivable from Sierra Gorda. An offsetting amount is
recorded in the Sierra Gorda joint venture adjustments noted above;
and
|
|
-
|
Gains on non-trading derivative
instruments, contingent consideration and other investments
measured at fair value through profit and loss (-US$4M):
revaluation of the contingent consideration
receivable(38) from the sale of Illawarra Metallurgical
Coal due to higher metallurgical coal prices (-US$53M). This was
largely offset by the revaluation of the contingent consideration
payable(39) in relation to our acquisition of Sierra
Gorda, as we expect to make a contingent payment in relation to
CY25 performance (+US$50M).
|
Further information on these
adjustments is included on page 45.
Profit/(loss) to Underlying EBITDA
reconciliation(8)
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Operating profit/(loss) from
continuing operations
|
520
|
(52)
|
|
Operating profit/(loss) from a
discontinued operation
|
-
|
127
|
|
Adjustments to derive Underlying
EBIT:
|
|
|
|
Joint venture
adjustments(40)
|
22
|
118
|
|
Net (gains)/losses on the disposal
of subsidiaries and joint operations
|
47
|
-
|
|
Exchange rate (gains)/losses on
the restatement of monetary items
|
7
|
13
|
|
Net impairment loss/(reversal) of
financial assets
|
71
|
48
|
|
Gains on non-trading derivative
instruments, contingent consideration and other investments
measured at fair value through profit and loss
|
(4)
|
(18)
|
|
Total adjustments to derive
Underlying EBIT
|
143
|
161
|
|
Underlying EBIT
|
663
|
236
|
|
Underlying depreciation and
amortisation
|
355
|
472
|
|
Underlying EBITDA
|
1,018
|
708
|
Profit/(loss) to Underlying
earnings reconciliation(8)
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Profit/(loss) after tax
attributable to members
|
360
|
53
|
|
Total adjustments to derive
Underlying EBIT
|
143
|
161
|
|
Total adjustments to derive
Underlying net finance costs
|
(152)
|
(109)
|
|
Total adjustments to derive
Underlying income and royalty related tax expense
|
24
|
(65)
|
|
Underlying
earnings(2)
|
375
|
40
|
Earnings analysis
The following key factors
influenced Underlying EBIT in H1 FY25, relative to H1
FY24.
Reconciliation of movements in
Underlying EBIT (US$M)(10)(41)(42)(43)
|
Earnings analysis
|
US$M
|
|
Commentary
|
|
H1 FY24 Underlying EBIT
|
236
|
|
|
|
Change in sales price
|
627
|
|
Higher average realised prices for
our commodities, including:
Alumina (+US$282M)
Aluminium
(+US$223M)
Copper (+US$39M), silver (+US$36M)
and zinc (+US$16M)
|
|
Net impact of price-linked
costs
|
84
|
|
Lower aluminium smelter raw
material input prices (coke and pitch) (+US$56M)
Lower electricity prices at Brazil
Aluminium (+US$18M)
Lower price-linked royalties at
Cerro Matoso (+US$16M)
|
|
Change in exchange
rates
|
11
|
|
Weaker Brazilian real (+US$29M)
and Chilean peso (+US$13M)
Partially offset by a stronger
South African rand (-US$28M) and Australian dollar
(-US$8M)
|
|
Change in inflation
|
(72)
|
|
Inflation-linked indexation of our
Southern African aluminium smelter electricity prices
(-US$17M)
General inflation across Southern
Africa (-US$20M), Australia (-US$18M) and South America
(-US$17M)
|
|
Change in sales volume
|
109
|
|
Higher volumes at Hillside
Aluminium (+US$93M), Brazil Aluminium (+US$47M), Sierra Gorda
(+US$44M) and Mozal Aluminium (+US$19M)
Partially offset by lower volumes
at Worsley Alumina (-US$61M) and Cannington (-US$40M)
|
|
Controllable costs
|
(177)
|
|
Drawdown of finished goods
inventory at Hillside Aluminium (-US$73M) and Sierra Gorda
(-US$7M), supporting higher sales volumes
Inventory and volume related
movements at Brazil Aluminium (-US$42M) as the smelter continues to
ramp-up toward nameplate capacity
Additional planned maintenance and
contractor costs (-US$64M), most notably at Hillside Aluminium,
Brazil Alumina and Mozal Aluminium
Higher caustic consumption at
Worsley Alumina (-US$21M) primarily due to lower quality bauxite in
the current mining areas as a result of delayed mining
approvals
Partially offset by cost
efficiencies at Cerro Matoso (+US$22M) and lower labour costs at
Sierra Gorda (+US$17M), following the prior period's one-off
workforce payment
|
|
Portfolio changes
|
(75)
|
|
Reduced contribution from
Illawarra Metallurgical Coal following its sale in August 2024
(-US$80M)
Lower costs following the
divestment of our interest in Eagle Downs in August 2024
(+US$5M)
|
|
Other
|
(80)
|
|
Reduced contribution from
Australia Manganese due to Tropical Cyclone Megan
(-US$101M)
Higher third party product and
services EBIT (+US$10M)
|
|
H1 FY25 Underlying EBIT
|
663
|
|
|
Net finance
income/(costs)
The Group's Underlying
net finance costs decreased by US$26M to US$92M
in H1 FY25. These costs primarily comprised the unwinding of the
discount applied to our closure and rehabilitation provisions
(US$65M), interest on lease liabilities (US$29M) largely for our
multi-fuel co-generation facility at Worsley Alumina, and interest
on our US$700M of senior unsecured notes
(US$16M).
Underlying net finance costs
reconciliation
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Unwind of discount applied to
closure and rehabilitation provisions
|
(65)
|
(76)
|
|
Interest on lease
liabilities
|
(29)
|
(28)
|
|
Interest on senior unsecured
notes
|
(16)
|
(16)
|
|
Other
|
18
|
2
|
|
Underlying net finance
costs
|
(92)
|
(118)
|
|
Add back earnings adjustment for
exchange rate variations on net debt
|
37
|
(1)
|
|
Joint venture
adjustments(40)
|
115
|
110
|
|
Total adjustments to derive
Underlying net finance costs
|
152
|
109
|
|
Remove net finance costs from a
discontinued operation
|
3
|
3
|
|
Net finance
income/(costs)
|
63
|
(6)
|
Tax expense
The Group's Underlying income tax
and royalty related taxation expense, which includes our material
EAIs, increased by US$119M to US$197M in H1 FY25, for an Underlying
effective tax rate (ETR)(44) of 33.7% (FY24: 38.8%). Our
Group Underlying ETR reflects the corporate tax
rates(45) and royalty related taxes(46) of
the jurisdictions in which we operate and our geographical earnings
mix.
The Underlying ETR for our
manganese business was 0% in H1 FY25, reflecting the temporary
suspension of operations at Australia Manganese due to Tropical
Cyclone Megan. The Underlying ETR for our Sierra Gorda EAI was
18.9% in H1 FY25, reflecting royalty related tax(46),
and the reversal of a prior period accrual.
Underlying income tax and royalty
related taxation expense reconciliation(8)
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Underlying EBIT
|
663
|
236
|
|
Include: Underlying net finance
costs
|
(92)
|
(118)
|
|
Remove: Share of (profit)/loss of
EAIs
|
13
|
11
|
|
Underlying profit/(loss) before
tax
|
584
|
129
|
|
|
|
|
|
Income tax expense/(benefit) from
continuing operations
|
210
|
(32)
|
|
Income tax expense/(benefit) from
a discontinued operation
|
11
|
45
|
|
Tax effect of other adjustments to
derive Underlying EBIT
|
-
|
4
|
|
Tax effect of other adjustments to
derive Underlying net finance costs
|
(11)
|
1
|
|
Exchange rate variations on tax
balances
|
(20)
|
20
|
|
Joint venture adjustments relating
to income tax(40)
|
(1)
|
18
|
|
Joint venture adjustments relating
to royalty related tax(40)
|
8
|
22
|
|
Total adjustments to derive
Underlying income tax (expense)/benefit
|
(24)
|
65
|
|
Underlying income tax
expense/(benefit)
|
197
|
78
|
|
Underlying effective tax
rate
|
33.7 %
|
60.5 %
|
Cash flow
Group free cash flow from
operations, excluding EAIs, improved by US$361M for an outflow of
US$116M in H1 FY25, as a significant increase in profitability, and
lower sustaining capital expenditure (-US$145M) following the sale
of Illawarra Metallurgical Coal, more than offset our investment in
growth at Hermosa (+US$60M).
Working capital increased by
US$267M due to an increase in inventories and elevated trade
receivables at period end due to higher commodity prices and the
timing of shipments in Q2 FY25.
Separately, we received net
distributions(35) of US$86M from our Sierra Gorda EAI in
H1 FY25 (H1 FY24: US$18M), and provided US$63M of funding to our
manganese EAI in H1 FY25 to support the operational recovery plan
at Australia Manganese.
Free cash flow from operations
excluding EAIs
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Operating profit/(loss) from
continuing and discontinued operations
|
520
|
75
|
|
Non-cash or non-operating
items
|
280
|
421
|
|
Share of (profit)/loss from
EAIs
|
(80)
|
9
|
|
Loss from sale of
operations
|
47
|
-
|
|
Change in working
capital
|
(267)
|
(276)
|
|
Cash generated from
operations
|
500
|
229
|
|
Total capital expenditure,
excluding EAIs, including intangibles and capitalised
exploration
|
(478)
|
(584)
|
|
Operating cash flows generated
from operations after capital expenditure
|
22
|
(355)
|
|
Net interest
paid(47)
|
(22)
|
(26)
|
|
Income tax paid
|
(116)
|
(96)
|
|
Free cash flow from
operations
|
(116)
|
(477)
|
Working capital
movement
|
US$M
|
H1
FY25
|
Commentary
|
|
Trade and other
receivables
|
(10)
|
Reflected elevated receivables at
the end of the period due to higher commodity prices and the timing
of shipments
|
|
Inventories
|
(115)
|
Reflected an increase in
inventories in our aluminium value chain due to higher commodity
prices
|
|
Trade and other
payables
|
(95)
|
Reflected the timing of payments
to suppliers
|
|
Provisions and other
liabilities
|
(47)
|
Reflected the timing of payments
and revaluation of provisions
|
|
Total working capital
movement
|
(267)
|
|
Capital expenditure
The Group's capital
expenditure(48), excluding EAIs, decreased by US$106M to
US$478M in H1 FY25, as lower sustaining capital expenditure
following the sale of Illawarra Metallurgical Coal was partially
offset by our investment in growth at Hermosa:
- Safe and reliable
capital expenditure, including Illawarra Metallurgical Coal
(US$57M), decreased by US$145M to US$190M;
- Improvement and life extension capital expenditure decreased
by US$20M to US$19M, with activity for new mining areas at Worsley
Alumina to increase in H2 FY25 following
the receipt of environmental approvals;
- Growth capital
expenditure increased by US$60M to US$248M at Hermosa, as we
progressed construction of the Taylor zinc-lead-silver project and
an exploration decline for the Clark battery-grade manganese
deposit; and
- Intangibles and
capitalised exploration expenditure was US$21M, as we completed
multiple exploration programs across our portfolio focused on base
metals.
Our share of capital expenditure
for our material EAIs increased by US$15M to US$185M in H1
FY25:
- Capital expenditure for
our Sierra Gorda EAI increased by US$9M to US$113M, as the
operation continued its investment in deferred stripping and the
feasibility study for the fourth grinding line project;
and
- Capital expenditure for
our manganese EAIs increased by US$6M to US$72M, as Australia
Manganese invested in infrastructure to deliver the operational
recovery plan.
Capital expenditure (South32
share)(43)(48)
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Safe and reliable capital
expenditure
|
(133)
|
(155)
|
|
Improvement and life extension
capital expenditure
|
(19)
|
(39)
|
|
Growth capital
expenditure
|
(248)
|
(188)
|
|
Intangibles and the capitalisation
of exploration expenditure
|
(21)
|
(17)
|
|
Discontinued operation - Illawarra
Metallurgical Coal
|
(57)
|
(185)
|
|
Total capital expenditure
(excluding EAIs)
|
(478)
|
(584)
|
|
EAIs capital
expenditure
|
(185)
|
(170)
|
|
Total capital expenditure
(including EAIs)
|
(663)
|
(754)
|
Balance sheet
Group net debt decreased by
US$715M to US$47M in H1 FY25, as improved profitability, and the
sale of Illawarra Metallurgical Coal (+US$938M(36)),
more than offset our investment in growth at Hermosa (-US$248M) and
returns to shareholders (-US$169M).
We continue to prioritise a strong
balance sheet and investment grade credit rating through the cycle.
Our current BBB+/Baa1 credit ratings were re-affirmed by S&P
Global Ratings and Moody's respectively during CY24. We also retain
access to significant liquidity, having successfully extended our
undrawn sustainability-linked revolving credit facility of US$1.4B
to December 2028.
Net debt
|
US$M
|
H1
FY25
|
FY24
|
|
Cash and cash
equivalents
|
1,600
|
842
|
|
Lease liabilities
|
(660)
|
(710)
|
|
Other interest bearing
liabilities
|
(987)
|
(894)
|
|
Net debt(a)
|
(47)
|
(762)
|
(a)
FY24 net debt includes Illawarra Metallurgical Coal and Eagle Downs
metallurgical coal which were classified as held for
sale.
Dividends and capital
management
Our unchanged capital management
framework supports investment in our business and is designed to
reward shareholders as our financial performance improves.
Consistent with our policy to distribute a minimum 40% of
Underlying earnings as ordinary dividends, the Board has resolved
to pay a fully-franked interim ordinary dividend of US 3.4 cents
per share (US$154M) in respect of H1 FY25, representing 41% of
Underlying earnings.
Reflecting our strong financial
position and track record of returning excess capital to
shareholders, we will continue returns under our US$2.5B capital
management program via our on-market share buy-back in H2 FY25. Our
capital management program has US$171M remaining to be returned to
shareholders ahead of its extension or expiry on 12 September
2025(37).
Dividends announced
|
Period
|
Dividend
per share
(US cents)
|
US$M
|
Franking
|
Pay-out
ratio
|
|
H1 FY23
|
4.9
|
224
|
100 %
|
40
%
|
|
H2 FY23
|
3.2
|
145
|
100 %
|
41
%
|
|
H1 FY24
|
0.4
|
18
|
100 %
|
45
%
|
|
H2 FY24
|
3.1
|
140
|
100 %
|
41
%
|
|
H1 FY25
|
3.4
|
154
|
100 %
|
41
%
|
South32 shareholders registered on
the South African branch register will not be able to dematerialise
or rematerialise their shareholdings between 5 and 7 March 2025
(both dates inclusive), nor will transfers to/from the South
African branch register be permitted between 27 February and 7
March 2025 (both dates
inclusive).
Details of the currency exchange
rates applicable for the dividend will be announced to the relevant
stock exchanges. Further dividend information is available on our
website (www.south32.net).
South32 American Depositary
Receipts (ADRs) each represent five fully paid ordinary shares in
South32 and ADR holders will receive dividends accordingly, subject
to the terms of the Depositary Agreement.
|
Dividend timetable
|
Date
|
|
Announce currency conversion into
South African rand
|
28 February 2025
|
|
Last day to trade cum dividend on
the Johannesburg Stock Exchange (JSE)
|
4 March 2025
|
|
Ex-dividend date on the
JSE
|
5 March 2025
|
|
Ex-dividend date on the ASX and
London Stock Exchange (LSE)
|
6 March 2025
|
|
Record date (including currency
election date for ASX)
|
7 March 2025
|
|
Payment date
|
3 April 2025
|
OUTLOOK
Production
All FY25
production guidance remains unchanged,
except for Mozal Aluminium where production guidance has been
updated to 350kt(28) (previously
360kt(28)(29)), subject to further potential impacts of
civil unrest in Mozambique.
Production guidance (South32
share)(43)
|
|
H1
FY25
|
FY25e(a)
|
FY26e(a)
|
Key FY25 guidance
assumptions
|
|
Worsley Alumina
|
|
|
|
Guidance unchanged
Additional planned calciner
maintenance in Q3 FY25
|
|
Alumina production (kt)
|
1,850
|
3,750
|
3,750
|
|
Brazil Alumina
(non-operated)
|
|
|
|
Guidance unchanged
Plant availability continuing to
improve
|
|
Alumina production (kt)
|
682
|
1,350
|
1,380
|
|
Brazil Aluminium
(non-operated)
|
|
|
|
Guidance unchanged
Ramping up across all three
potlines
|
|
Aluminium production
(kt)
|
64
|
130
|
160
|
|
Hillside
Aluminium(28)
|
|
|
|
Guidance unchanged
Expected to continue to test
maximum technical capacity
|
|
Aluminium production
(kt)
|
362
|
720
|
720
|
|
Mozal
Aluminium(28)
|
|
|
|
Guidance updated to 350kt (from 360kt(29))
Subject to further potential
impacts of civil unrest in Mozambique
|
|
Aluminium production
(kt)
|
178
|
350
|
370
|
|
Sierra Gorda
(non-operated)
|
|
|
|
Guidance unchanged
Benefitting from the plant
de-bottlenecking project and improved ore quality in the current
phase of the mine plan
|
|
Ore processed (Mt)
|
11.1
|
21.8
|
22.0
|
|
Payable copper equivalent
production (kt)(30)
|
46.4
|
84.8
|
86.1
|
|
Payable copper production
(kt)
|
36.7
|
70.0
|
74.0
|
|
Payable molybdenum production
(kt)
|
0.9
|
1.3
|
1.0
|
|
Payable gold production
(koz)
|
15.9
|
25.0
|
20.0
|
|
Payable silver production
(koz)
|
301
|
550
|
600
|
|
Cannington
|
|
|
|
Guidance unchanged
Continuing to manage increased
underground activity and complexity
Ore processed volumes weighted to
H2 FY25
|
|
Ore processed (kdmt)
|
982
|
2,100
|
2,200
|
|
Payable zinc equivalent production
(kt)(31)
|
129.9
|
265.4
|
282.2
|
|
Payable silver production
(koz)
|
5,615
|
11,300
|
12,000
|
|
Payable lead production
(kt)
|
49.6
|
100.0
|
110.
|
|
Payable zinc production
(kt)
|
22.9
|
50.0
|
50.0
|
|
Cerro Matoso
|
|
|
|
Guidance unchanged
Lower planned nickel grades in
accordance with the mine plan
|
|
Ore processed (kdmt)
|
1,396
|
2,750
|
Subject
to potential divestment
|
|
Payable nickel production
(kt)
|
18.5
|
35.0
|
|
Australia Manganese
|
|
|
|
Guidance unchanged
Limited production rates in H2
FY25 as we progress the recovery plan
|
|
Manganese ore production
(kwmt)
|
639
|
1,000
|
3,200
|
|
South Africa Manganese
|
|
|
|
Guidance unchanged
Continuing to monitor and respond
to market conditions
|
|
Manganese ore production
(kwmt)
|
1,082
|
2,000
|
2,00
|
(a)
The denotation (e) refers to an estimate or forecast
year.
Costs and capital
expenditure
Operating unit costs performance
and guidance
We remain focused on delivering
stable operating performance and cost efficiencies to offset
inflationary pressures. Our
operating discipline combined with
weaker producer currencies is expected to support lower Operating
unit costs for the majority of our guided operations in H2
FY25.
While Operating unit cost guidance
is not provided for our aluminium smelters, their cost profile will
continue to be influenced by producer currencies, and the prices of
raw material inputs and energy.
Operating unit
cost(49)
|
|
H1
FY24
|
H1
FY25
|
FY25
prior guidance(a)
|
FY25 new
guidance(b)
|
H1 FY25 to H1 FY24
commentary
FY25 new guidance to FY25 prior
guidance commentary
|
|
|
Worsley Alumina
|
|
|
|
|
|
|
|
(US$/t)
|
258
|
306
|
290
|
305
|
H1 FY25: higher caustic soda
consumption in current mining areas, and increased gas consumption
as part of the refinery's energy transition
FY25e guidance increased by 5%, with higher caustic soda consumption more than offsetting a
weaker Australian dollar
|
|
|
Brazil Alumina
(non-operated)
|
|
|
|
|
|
|
|
(US$/t)
|
325
|
320
|
Not
provided
|
Not
provided
|
H1 FY25: improved operating
performance and a weaker Brazilian real, more than offset higher
maintenance and bauxite costs
FY25e: will continue to be
influenced by energy and the price of raw material
inputs
|
|
|
Brazil Aluminium
(non-operated)
|
|
|
|
|
|
|
|
(US$/t)
|
4,025
|
3,377
|
Not
provided
|
Not
provided
|
H1 FY25: higher volumes and
lower energy prices,
more than offset higher alumina
prices
FY25e: benefitting from
higher volumes, while continuing to be influenced by the price of
raw material inputs and energy
|
|
|
Hillside Aluminium
|
|
|
|
|
|
|
|
(US$/t)
|
2,135
|
2,351
|
Not
provided
|
Not
provided
|
H1 FY25: higher sales volumes
and lower raw material input prices (coke and pitch), more than
offset by higher alumina and energy prices, and a stronger South
African rand
FY25e: will continue to be
influenced by the price of raw material inputs, the South African
rand and inflation-linked indexation energy costs
|
|
|
Mozal Aluminium
|
|
|
|
|
|
|
|
(US$/t)
|
2,461
|
2,425
|
Not
provided
|
Not
provided
|
H1 FY25: higher volumes and
lower raw material input prices (coke and pitch), more than offset
by higher alumina and energy prices, and a stronger South African
rand
FY25e: will continue to be
influenced by the price of raw material inputs, the South African
rand and inflation-linked indexation energy costs
|
|
|
|
Sierra Gorda
(non-operated)
|
|
|
|
|
|
|
|
(US$/t)(c)
|
18.8
|
17.1
|
16.0
|
16.0
|
H1 FY25: improved throughput
and lower labour costs, more than offset additional planned
maintenance and a drawdown of finished goods inventory
FY25e guidance unchanged, with H2
FY25 costs expected to be lower (from H1 FY25) following a drawdown
of inventory in H1 FY25
|
|
|
Cannington
|
|
|
|
|
|
|
|
(US$/t)(c)
|
150
|
197
|
170
|
175
|
H1 FY25: additional mining
costs to deliver the planned increase in underground activity and
lower ore processed
FY25e guidance increased by 3%, with H2 FY25 costs expected to be lower (from H1 FY25) due to
higher ore processed and a weaker Australian dollar
|
|
|
Cerro Matoso
|
|
|
|
|
|
|
|
(US$/lb)
|
5.57
|
5.13
|
5.65
|
5.35
|
H1 FY25: cost efficiencies,
lower price-linked royalties and a weaker Colombian
peso
FY25e guidance lowered by 5%, due to cost efficiencies and a weaker Colombian
peso
|
|
|
Australia Manganese
|
|
|
|
|
|
|
|
(US$/dmtu, FOB)
|
2.15
|
N/A
|
Not
provided
|
Not
provided
|
Subject to the operational
recovery plan
|
|
|
South Africa Manganese
|
|
|
|
|
|
|
|
(US$/dmtu, FOB)
|
2.59
|
3.13
|
3.00
|
3.00
|
H1 FY25: stronger South
African rand and local inflationary pressures
FY25e guidance unchanged, with H2 FY25 costs expected to be lower (from H1 FY25) as we
target further cost efficiencies, and lower price-linked
royalties
|
|
|
|
|
|
|
|
| |
(a)
FY25 prior Operating unit cost guidance includes royalties (where
appropriate) and commodity price and foreign exchange rate forward
curves or our internal expectations (refer to page
33 footnote
50).
(b)
FY25 new Operating unit cost guidance includes royalties (where
appropriate) and commodity price and foreign exchange rate forward
curves or our internal expectations (refer to page
33 footnote
51).
(c)
US dollar per tonne of ore processed. Periodic movements in
finished product inventory may impact Operating unit
costs.
Capital expenditure guidance
(excluding exploration and intangibles)
FY25 Group capital expenditure
guidance, excluding EAIs, has been revised
to US$895M(b) (from US$990M),
with:
- Group safe and reliable
capital expenditure, excluding EAIs, revised to
US$295M (from US$310M),
while spend will reduce in H2 FY25 (from H1 FY25) following the
sale of Illawarra Metallurgical Coal;
- Group
improvement and life extension capital expenditure,
excluding EAIs, revised to US$70M (from US$80M), with spend for the
Worsley Mine Development Project increasing in H2 FY25 following
the receipt of environmental approvals; and
- Growth capital
expenditure at Hermosa revised to US$530M(52) (from
US$600M) with spend re-phased to FY26 as we negotiated favourable
down payment terms for long lead items for surface infrastructure
and the Taylor processing plant.
Capital expenditure for our EAIs
has been held largely unchanged at US$380M (from US$385M) as we
invest to support copper production at Sierra Gorda and the
operational recovery plan at Australia Manganese.
Capital expenditure excluding
exploration and intangibles (South32
share)(43)
|
US$M
|
H1
FY25
|
FY25e(a)(b)
|
|
Worsley Alumina
|
38
|
90
|
|
Brazil Alumina
|
22
|
50
|
|
Brazil Aluminium
|
6
|
10
|
|
Hillside Aluminium
|
19
|
55
|
|
Mozal Aluminium
|
12
|
25
|
|
Cannington
|
23
|
45
|
|
Cerro Matoso
|
13
|
20
|
|
Safe and reliable capital
expenditure (excluding EAIs)
|
133
|
295
|
|
Worsley Alumina
|
12
|
35
|
|
Brazil Alumina
|
5
|
7
|
|
Other operations
|
2
|
28
|
|
Improvement and life extension
capital expenditure (excluding EAIs)
|
19
|
70
|
|
Hermosa
|
248
|
530
|
|
Growth capital
expenditure
|
248
|
530
|
|
Total capital expenditure
(excluding EAIs)
|
400
|
895
|
|
Total capital expenditure
(including EAIs)
|
578
|
1,275
|
Capital expenditure for EAIs
excluding exploration and intangibles (South32
share)(43)
|
US$M
|
H1
FY25
|
FY25e(a)
|
|
Sierra Gorda
|
90
|
185
|
|
Australia Manganese
|
47
|
125
|
|
South Africa Manganese
|
16
|
30
|
|
Safe and reliable capital
expenditure (EAIs)
|
153
|
340
|
|
Sierra Gorda
|
16
|
25
|
|
South Africa Manganese
|
9
|
15
|
|
Improvement and life extension
capital expenditure (EAIs)
|
25
|
40
|
|
Total capital expenditure
(EAIs)
|
178
|
380
|
(a)
The denotation (e) refers to an estimate or forecast
year.
(b)
FY25 capital expenditure guidance was not provided for Illawarra
Metallurgical Coal due to the sale process.
Capitalised exploration
guidance
FY25 Group
capitalised exploration, including EAIs, is unchanged at US$50M as
we continue base metals exploration programs across our portfolio.
This includes exploration programs at the Peake copper
deposit at our Hermosa project, and the Catabela Northeast copper
porphyry exploration prospect(53) at Sierra
Gorda.
Capitalised exploration (South32
share)(43)
|
US$M
|
H1
FY25
|
FY25e(a)
|
|
Capitalised exploration (excluding
EAIs)
|
19
|
40
|
|
EAIs capitalised
exploration
|
7
|
10
|
|
Capitalised exploration (including
EAIs)
|
26
|
50
|
(a)
The denotation (e) refers to an estimate or forecast
year.
Other expenditure
guidance
Other expenditure items presented
below are on a proportional consolidation basis including our
manganese and Sierra Gorda EAIs.
|
|
H1
FY25
|
FY25e(a)
|
Commentary
|
|
Group and unallocated expense in
Underlying EBIT (excluding Hermosa, greenfield exploration and
third party products and services EBIT)
|
|
(US$M)
|
83
|
100
|
Guidance unchanged
H1 FY25 reflected unfavourable
inter-group inventory adjustments in our aluminium value
chain (-US$38M)
Normalised run-rate expected in H2
FY25
|
|
Hermosa expenses included in
Underlying EBIT
|
|
(US$M)
|
17
|
30
|
Guidance unchanged
|
|
Underlying depreciation and
amortisation
|
|
(US$M)
|
355
|
720
|
Guidance revised to US$720M (from US$810M)
Lower depreciation at Australia
Manganese recognised in Underlying earnings
|
|
Underlying net finance
costs
|
|
|
|
|
(US$M)
|
92
|
190
|
Guidance unchanged
|
|
Greenfield exploration
|
|
|
|
|
(US$M)
|
18
|
30
|
Guidance unchanged
|
(a)
The denotation (e) refers to an estimate or forecast
year.
OPERATIONS ANALYSIS
A summary of the underlying
performance of the Group's operations is presented below and a more
detailed analysis is presented on pages 22 to 31. Unless otherwise stated: all
metrics reflect South32's share; Operating unit cost is Underlying
revenue less Underlying EBITDA excluding third party products and
services divided by sales volumes; Operating cost is Underlying
revenue less Underlying EBITDA excluding third party products and
services; and Realised sales price is calculated as Underlying
revenue excluding third party products and services divided by
sales volume.
Operations table (South32
share)(43)
|
|
Underlying revenue
|
Underlying EBIT
|
|
US$M
|
H1
FY25
|
H1
FY24
|
H1
FY25
|
H1
FY24
|
|
Worsley Alumina
|
916
|
653
|
280
|
68
|
|
Brazil Alumina
|
408
|
234
|
146
|
(9)
|
|
Brazil Aluminium
|
153
|
91
|
(55)
|
(74)
|
|
Hillside Aluminium
|
986
|
758
|
89
|
27
|
|
Mozal Aluminium
|
488
|
397
|
33
|
(48)
|
|
Sierra Gorda
|
405
|
322
|
128
|
49
|
|
Cannington
|
323
|
318
|
89
|
109
|
|
Hermosa
|
-
|
-
|
(17)
|
(9)
|
|
Cerro Matoso
|
239
|
238
|
27
|
(14)
|
|
Australia Manganese
|
-
|
318
|
(34)
|
67
|
|
South Africa Manganese
|
191
|
152
|
18
|
3
|
|
Third party products and
services(54)
|
190
|
156
|
10
|
-
|
|
Inter-segment / Group and
unallocated
|
(593)
|
(382)
|
(101)
|
(63)
|
|
South32 Group (excluding Illawarra
Metallurgical Coal)
|
3,706
|
3,255
|
613
|
106
|
|
Illawarra Metallurgical
Coal(55)
|
144
|
626
|
50
|
130
|
|
South32 Group
|
3,850
|
3,881
|
663
|
236
|
WORSLEY ALUMINA
Location: Western Australia,
Australia
South32 share: 86 per cent
Worsley Alumina is an integrated
bauxite mining and alumina refining operation in the South West of
Western Australia. Alumina from Worsley Alumina is exported to our
Hillside Aluminium and Mozal Aluminium smelters and other smelters
around the world.
Volumes
Worsley Alumina saleable
production decreased by 4% (or 84kt) to 1,850kt in H1 FY25, as we
managed constrained bauxite supply due to delayed approvals for new
mining areas, and completed planned calciner maintenance. FY25
production guidance remains unchanged at 3,750kt. Further planned
calciner maintenance is scheduled in Q3 FY25.
Worsley Alumina has now received
primary State(24) and Federal(25) environmental approvals
for the Worsley Mine Development Project (the Project). The Project
will enable access to bauxite to sustain production at Worsley
Alumina, with mining of bauxite areas located near our existing
operations expected to commence in Q4 FY25. We will now also
commence the development of new mining areas that are expected to
sustain production to at least FY36(26).
Operating costs
Operating unit costs increased by
19%, to US$306/t in H1 FY25, due to increased caustic soda
consumption in the current bauxite mining areas (H1 FY25: 134 kg/t,
H1 FY24: 110 kg/t) coupled with higher
caustic soda prices (H1 FY25: US$483/t, H1 FY24: US$460/t),
and higher gas consumption as the refinery
transitions toward lower carbon(56) energy
supply.
Our operating margin increased to
40% (H1 FY24: 25%) as a 49% increase in the average realised price
of alumina more than offset higher costs. Our average realised
price of alumina of US$512/t was a ~11% discount to the Platts
Alumina index(57), which reflected market based prices
except for legacy supply contracts with Mozal Aluminium which
reference the LME aluminium price.
We have revised FY25 Operating
unit cost guidance to US$305/t (previously
US$290/t) with higher caustic soda consumption to more than offset
a weaker Australian dollar. Exchange rate
and price assumptions for FY25 Operating unit cost guidance are
detailed on page 33, footnote 51.
Financial performance
Underlying EBIT increased by 312%
(or US$212M), to US$280M in H1 FY25, as higher average realised
alumina prices (+US$300M) more than offset lower sales volumes
(-US$37M), higher caustic soda costs (-US$27M), and energy costs
following the conversion of the first coal-fired boiler to natural
gas in the prior period (-US$10M).
Capital expenditure
Safe and reliable capital
expenditure increased by US$4M to US$38M in H1 FY25 and is expected
to be US$90M in FY25 as we invest in infrastructure to access new
mining areas and additional bauxite residue disposal
capacity.
Improvement and life extension
capital expenditure decreased by US$12M to US$12M in H1 FY25 as we
converted the first coal-fired boiler to natural gas in the prior
period. We expect to invest US$35M (previously US$45M) in FY25 with
activity for the Project to increase in H2 FY25 following the
receipt of environmental approvals.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Alumina production (kt)
|
1,850
|
1,934
|
|
Alumina sales (kt)
|
1,789
|
1,898
|
|
Realised alumina sales price
(US$/t)
|
512
|
344
|
|
Operating unit cost
(US$/t)
|
306
|
258
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
916
|
653
|
|
Underlying EBITDA
|
369
|
164
|
|
Underlying EBIT
|
280
|
68
|
|
Net operating
assets(a)
|
1,847
|
1,813
|
|
Capital expenditure
|
50
|
58
|
|
Safe and reliable
|
38
|
34
|
|
Improvement and life extension
|
12
|
24
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
BRAZIL ALUMINA
Location: Pará and Maranhão,
Brazil
South32 investment:
Bauxite - 33 per
cent
South32 share: Alumina - 36 per
cent
Brazil Alumina includes our 33%
interest in the Mineração Rio do Norte (MRN) bauxite mine and a 36%
interest in the Alumar alumina refinery. Our share of bauxite
produced from MRN is supplied to the Alumar refinery. The alumina
produced from Alumar refinery is supplied
to the co-located Alumar aluminium smelter and exported to other
smelters around the world.
Volumes
Brazil Alumina saleable production
increased by 7% (or 42kt) to 682kt in H1 FY25 as the refinery
benefitted from improved plant availability. FY25 production guidance remains unchanged at
1,350kt.
Operating costs
Operating unit costs decreased by
2%, to US$320/t in H1 FY25, as the refinery's improved operating
performance and a weaker Brazilian real more than offset higher
planned maintenance and bauxite costs.
Our operating margin increased to
43% (H1 FY24: 6%) as our average realised price of alumina
increased by 63% and costs were largely unchanged.
While Operating unit cost guidance
is not provided for this non-operated facility, the refinery will
continue to be influenced by energy and raw material input
prices.
Financial performance
Underlying EBIT increased by
US$155M, from a loss of US$9M, to US$146M in H1 FY25, as higher
sales volumes (+US$16M) and average realised alumina prices
(+US$158M), more than offset additional maintenance costs (-US$13M)
and higher bauxite costs from MRN linked to
alumina and aluminium prices on a trailing basis
(-US$5M).
Our share of the loss from our
equity interest in MRN was US$13M in H1 FY25 (H1 FY24: loss of
US$9M).
Capital expenditure
Capital expenditure decreased by
US$24M to US$27M in H1 FY25 following the refinery's investment in
plant de-bottlenecking in the prior period. We expect to invest
US$57M (previously US$63M) in FY25 as we continue our investment in
additional bauxite residue disposal capacity.
The partners of MRN continue to
progress a feasibility study for the West Zone project, which has
the potential to extend the life of the bauxite mine by more than
20 years(58). A preliminary environmental license for
the West Zone project was received in Q1 FY25. In Q2 FY25, the
partners made a final investment decision to construct a
transmission line to connect the MRN bauxite mine to the Brazilian
power grid. The transmission line will enable MRN to reduce
operating costs by replacing its diesel-powered generation with
cost efficient renewable energy sources. Our share of capital
expenditure for the transmission line is expected to be ~US$70M
(33% share) over FY25 to FY27.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
|
Alumina production (kt)
|
682
|
640
|
|
|
Alumina sales (kt)
|
691
|
647
|
|
|
Realised sales price
(US$/t)
|
590
|
362
|
|
|
Operating unit cost
(US$/t)(a)
|
320
|
325
|
|
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
|
Underlying revenue
|
408
|
234
|
|
|
Underlying EBITDA
|
174
|
15
|
|
|
Underlying EBIT
|
146
|
(9)
|
|
|
Net operating
assets(b)
|
732
|
736
|
|
|
Capital expenditure
|
27
|
51
|
|
|
Safe and reliable
|
22
|
38
|
|
|
Improvement and life extension
|
5
|
13
|
|
(a)
Excludes the profit/(loss) from our equity interest in
MRN.
(b)
H1 FY24 reflects the balance as at 30 June 2024.
BRAZIL ALUMINIUM
Location: Maranhão,
Brazil
South32 share: 40 per cent
The Brazil Aluminium smelter was
restarted during FY22 after being on care and maintenance since
2015.
Brazil Aluminium produces aluminium
for domestic and export markets, with alumina supplied by the
co-located Alumar refinery. Our share of Brazil Aluminium
production is powered by 100% renewable power.
Volumes
Brazil Aluminium saleable
production increased by 28% (or 14kt) to 64kt in H1 FY25 as the
smelter continued to ramp-up all three potlines. FY25 production
guidance remains unchanged at 130kt.
Operating costs
Operating unit costs decreased by
16%, to US$3,377/t in H1 FY25, as the smelter continued to ramp-up
and benefitted from lower renewable energy prices, more than
offsetting higher alumina prices.
While Operating unit cost guidance
is not provided for this non-operated facility, Operating unit
costs are expected to continue to moderate with planned production
growth of 25% in FY25 and 23% in FY26 as the smelter ramps-up
toward nameplate capacity.
Financial performance
Underlying EBIT improved by
US$19M, to a loss of US$55M in H1 FY25, as higher sales volumes
(+US$47M) and average realised aluminium prices (+US$15M), a weaker
Brazilian real (+US$18M) and lower energy prices (+US$18M), more
than offset higher alumina prices (-US$31M), and inventory and
volume related movements (-US$42M) as the smelter continued to
ramp-up.
Capital expenditure
Capital expenditure was US$6M in
H1 FY25 and is expected to be US$10M (previously US$12M) in
FY25.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
|
Aluminium production
(kt)
|
64
|
50
|
|
|
Aluminium sales (kt)
|
61
|
40
|
|
|
Realised sales price
(US$/t)
|
2,508
|
2,275
|
|
|
Operating unit cost
(US$/t)
|
3,377
|
4,025
|
|
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
|
Underlying revenue
|
153
|
91
|
|
|
Underlying EBITDA
|
(53)
|
(70)
|
|
|
Underlying EBIT
|
(55)
|
(74)
|
|
|
Net operating
assets(a)
|
74
|
68
|
|
|
Capital expenditure
|
6
|
4
|
|
|
Safe and reliable
|
6
|
4
|
|
|
Improvement and life extension
|
-
|
-
|
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
HILLSIDE ALUMINIUM
Location: KwaZulu-Natal, South
Africa
South32 share: 100 per
cent
Hillside Aluminium is located in
Richards Bay, South Africa, and is the largest aluminium smelter in
the southern hemisphere. The smelter produces high-quality, primary
aluminium for domestic and export markets.
Volumes
Hillside Aluminium saleable
production increased by 1% (or 3kt) to 362kt in H1 FY25 as the
smelter continued to test its maximum technical capacity, despite
the impact of load-shedding. FY25 production guidance remains
unchanged at 720kt(28).
Operating costs
Operating unit costs increased by
10%, to US$2,351/t in H1 FY25, as the smelter's strong operating
performance and lower raw material input prices (coke and pitch),
was more than offset by higher alumina prices, a stronger South
African rand and inflation-linked indexation of energy
costs.
Our operating margin increased to
12% (H1 FY24: 8%) as a 16% increase in the average realised price
of aluminium more than offset higher costs.
While Operating unit cost guidance
is not provided, the cost profile of the smelter will continue to
be heavily influenced by the price of smelter raw material inputs,
including alumina supplied by our Worsley Alumina refinery, and
other external factors including the South
African rand and inflation-linked indexation energy
costs.
Financial performance
Underlying EBIT increased by 230%
(or US$62M), to US$89M in H1 FY25, as higher sales volumes
(+US$93M) and average realised aluminium prices (+US$135M), and
lower smelter raw material input prices (coke and pitch) (+US$35M),
more than offset higher alumina prices
(-US$81M), a stronger South African rand (-US$18M)
and a drawdown in inventory to support a 12%
increase in sales volumes (-US$65M).
95 pots were relined at a cost of
US$305k per pot in H1 FY25 (H1 FY24: 52 pots at US$350k per pot),
with ~140 pots scheduled to be relined in FY25. The smelter is
deploying AP3XLE energy efficiency technology in its pot relining
activity to further enhance the smelter's
energy efficiency and reduce GHG emissions. At the end of H1 FY25,
~50% of the pots had been relined using AP3XLE
technology.
The smelter's energy costs
increased by US$6M in H1 FY25, as energy efficiency benefits
delivered by AP3XLE technology (+US$6M) were more than offset by
the inflation-linked indexation of energy costs
(-US$12M).
Capital expenditure
Capital expenditure decreased by
US$6M to US$19M in H1 FY25. We expect to invest US$55M (previously
US$65M) in FY25 as we invest in fleet replacements and progress
work to replace the smelter's pot tending assemblies. Capital
expenditure is expected to be elevated over
FY25 and FY26 as we continue work to replace the pot tending
assemblies.
South32 share
|
H1
FY25
|
H1
FY24
|
|
Aluminium production
(kt)
|
362
|
359
|
|
Aluminium sales (kt)
|
367
|
327
|
|
Realised sales price
(US$/t)
|
2,687
|
2,318
|
|
Operating unit cost
(US$/t)
|
2,351
|
2,135
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
986
|
758
|
|
Underlying EBITDA
|
123
|
60
|
|
Underlying EBIT
|
89
|
27
|
|
Net operating
assets(a)
|
889
|
805
|
|
Capital expenditure
|
19
|
25
|
|
Safe and reliable
|
19
|
24
|
|
Improvement and life extension
|
-
|
1
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
MOZAL ALUMINIUM
Location: Maputo,
Mozambique
South32 share: 63.7 per
cent
Mozal Aluminium is located near
Maputo, Mozambique, and is a significant industrial employer in the
country. The smelter produces high-quality, primary aluminium
for domestic and export markets.
Volumes
Mozal Aluminium saleable
production increased by 7% (or 12kt) to 178kt in H1 FY25 as the
smelter approached nameplate capacity following completion of its
operational recovery plan, despite the impact of
load-shedding.
In December 2024, following the
impacts of civil unrest in Mozambique, we took the decision to
reduce amperage to the smelter to preserve raw materials and
maintain operational stability(59). In recent weeks, we
have re-built alumina stocks at the smelter as we successfully
implemented contingency plans and road blockages eased. As a
result, we have updated FY25 production guidance to
350kt(28) (previously 360kt(28)(29)), subject
to further potential impacts of civil unrest in
Mozambique.
FY26 production guidance has been
reinstated at 370kt(28), subject to the extension of the
current power supply agreement for Mozal Aluminium, which expires
in March 2026.
We continue to work with Eskom and
the Government of the Republic of Mozambique to extend the
smelter's hydro-electric power supply beyond March 2026, as there
are currently no viable alternative suppliers of renewable energy
at the required scale. We remain focused on finalising a new energy
supply agreement during CY25 to enable the smelter to continue to
operate and maintain its substantial
contribution to the economy of Mozambique.
Operating costs
Operating unit costs decreased by
1%, to US$2,425/t in H1 FY25, as the
smelter completed the operational recovery plan and benefitted from
lower raw material input prices (coke and pitch), more than
offsetting higher alumina prices, a stronger South African rand and
inflation-linked indexation of energy costs.
Our operating margin increased to
14% (H1 FY24: -4%) as our average realised price of aluminium
increased by 18% and costs were largely unchanged.
While Operating unit cost guidance
is not provided, the cost profile of the smelter will continue to
be heavily influenced by the price of smelter raw material inputs,
including alumina supplied by our Worsley Alumina refinery, and
other external factors including the South
African rand and inflation-linked indexation of energy
costs.
Financial performance
Underlying EBIT increased by
US$81M, from a loss of US$48M, to US$33M in H1 FY25, as higher
sales volumes (+US$19M) and average realised aluminium prices
(+US$72M), and lower smelter raw material
input prices (coke and pitch) (+US$18M), more than offset higher
alumina prices (-US$16M), a stronger South African rand
(-US$6M) and inflation-linked indexation energy costs
(-US$5M).
86(60) pots were relined
at a cost of US$368k per pot in H1 FY25 (H1 FY24: 50(60)
pots at US$367k per pot), with ~150(60) pots scheduled
to be relined in FY25. The smelter completed the roll-out of the
AP3XLE energy efficiency technology in its pot relining program in
the prior period.
Capital expenditure
Safe and reliable capital
expenditure was US$12M in H1 FY25 and is expected to be US$25M in
FY25.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Aluminium production
(kt)
|
178
|
166
|
|
Aluminium sales (kt)
|
174
|
167
|
|
Realised sales price
(US$/t)
|
2,805
|
2,377
|
|
Operating unit cost
(US$/t)
|
2,425
|
2,461
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
488
|
397
|
|
Underlying EBITDA
|
66
|
(14)
|
|
Underlying EBIT
|
33
|
(48)
|
|
Net operating
assets(a)
|
500
|
498
|
|
Capital expenditure
|
12
|
11
|
|
Safe and reliable
|
12
|
11
|
|
Improvement and life extension
|
-
|
-
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
SIERRA GORDA
Location: Antofagasta,
Chile
South32 share: 45 per cent
Sierra Gorda is a large scale,
open-pit mine in the prolific Antofagasta copper mining region,
that produces copper, molybdenum, gold and silver.
Volumes
Sierra Gorda payable copper
equivalent production(30) increased by 21% (or 8.0kt) to
46.4kt in H1 FY25, with higher planned copper grades and a
significant increase in molybdenum recoveries due to improved ore
quality. FY25 production guidance remains unchanged at 84.8kt
payable copper equivalent (copper 70.0kt, molybdenum 1.3kt, gold
25.0koz and silver 550koz).
Operating costs
Operating unit costs decreased by
9%, to US$17.1/t ore processed in H1 FY25, as improved plant
throughput delivered by the de-bottlenecking project, and lower
labour costs following a one-off workforce payment in the prior
period, more than offset additional planned maintenance, and a
drawdown of finished goods inventory.
Our operating margin increased to
53% (H1 FY24: 36%) as we realised higher average metal prices and
costs decreased.
FY25 Operating unit cost guidance
is unchanged at US$16.0/t ore processed,
with H2 FY25 costs expected to be lower (from H1 FY25) following a
drawdown of finished goods inventory in H1 FY25.
Exchange rate and price assumptions for FY25
Operating unit cost guidance are detailed on page
33, footnote
51.
Financial performance
Underlying EBIT increased by 161%
(or US$79M), to US$128M in H1 FY25, as
higher sales volumes (+US$44M) and average realised metal prices
(+US$39M), a weaker Chilean peso (+US$13M) and lower labour costs
(+US$17M), more than offset additional planned maintenance
(-US$15M) and a drawdown of finished goods inventory
(-US$7M).
Depreciation and amortisation
increased by US$19M to US$87M in H1 FY25 in line with recent
capital investments.
Capital expenditure
Safe and reliable
capital expenditure was US$90M in H1 FY25 and is
expected to be US$185M in FY25 as the operation continues
deferred stripping activity and invests in additional tailings
infrastructure.
Improvement and life extension
capital expenditure was US$16M in H1 FY25 and is expected to be
US$25M in FY25, as the operation continues additional engineering
studies and a feasibility study for the fourth grinding line
project. The project has the potential to
increase processing capacity by ~20% to ~58Mtpa (100% basis).
Completion of the feasibility study and a final investment decision by the joint venture partners is expected
in H1 FY26.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Ore mined (Mt)
|
12.6
|
11.9
|
|
Ore processed (Mt)
|
11.1
|
10.9
|
|
Ore grade processed (%,
Cu)
|
0.42
|
0.37
|
|
Payable copper equivalent
production (kt)(30)
|
46.4
|
38.4
|
|
Payable copper production
(kt)
|
36.7
|
31.6
|
|
Payable molybdenum production
(kt)
|
0.9
|
0.5
|
|
Payable gold production
(koz)
|
15.9
|
13.4
|
|
Payable silver production
(koz)
|
301
|
295
|
|
Payable copper sales
(kt)
|
37.9
|
32.5
|
|
Payable molybdenum sales
(kt)
|
0.7
|
0.7
|
|
Payable gold sales
(koz)
|
16.2
|
13.8
|
|
Payable silver sales
(koz)
|
317
|
300
|
|
Realised copper sales price
(US$/lb)
|
3.83
|
3.56
|
|
Realised molybdenum sales
price
(US$/lb)
|
21.68
|
20.82
|
|
Realised gold sales price
(US$/oz)
|
2,593
|
1,957
|
|
Realised silver sales price
(US$/oz)
|
31.5
|
23.3
|
|
Operating unit cost
(US$/t ore processed)(61)
|
17.1
|
18.8
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
405
|
322
|
|
Underlying EBITDA
|
215
|
117
|
|
Underlying EBIT
|
128
|
49
|
|
Net operating
assets(a)
|
1,708
|
1,664
|
|
Capital expenditure
|
106
|
98
|
|
Safe and reliable
|
90
|
83
|
|
Improvement and life extension
|
16
|
15
|
|
Exploration expenditure
|
7
|
6
|
|
Exploration expensed
|
-
|
-
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
CANNINGTON
Location: Queensland,
Australia
South32 share: 100 per
cent
Cannington is an underground mine
located in north-west Queensland, Australia, that produces
high-grade lead and zinc concentrates with a high silver
content.
Volumes
Cannington payable zinc equivalent
production(31) decreased by 17% to 129.9kt in H1 FY25,
as the operation managed increased underground activity and
complexity which is expected to continue to drive variability in
quarterly performance. Production improved by 56% in Q2 FY25 as
silver and lead grades increased in accordance with the mine
plan.
FY25 production guidance remains
unchanged at 265.4kt payable zinc equivalent (silver 11,300koz,
lead 100.0kt, zinc 50.0kt)
Operating costs
Operating unit costs increased by
31%, to US$197/t in H1 FY25, due to additional mining costs to
deliver the planned increase in underground activity, and lower ore
processed in the period.
Our operating margin decreased to
40% (H1 FY24: 46%) as higher average metal prices were more than
offset by additional mining costs.
FY25 Operating unit costs have
been revised to US$175/t ore processed (previously US$170/t) with
H2 FY25 costs expected to be lower (from H1 FY25) due to higher ore
processed and a weaker Australian dollar. Exchange rate and price
assumptions for FY25 Operating unit cost guidance are detailed on
page 33, footnote
51.
Financial performance
Underlying EBIT
decreased by 18% (or US$20M), to US$89M in H1 FY25, as higher
average metal prices (+US$45M) were more than offset by lower sales
volumes (-US$40M) and additional mining costs to deliver a planned
increase in underground activity (-US$10M).
Capital expenditure
Capital expenditure was US$23M in H1 FY25 and is expected to be
US$45M in FY25 as we invest in underground
development.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Ore mined (kwmt)
|
999
|
1,150
|
|
Ore processed (kdmt)
|
982
|
1,139
|
|
Ore grade processed (g/t,
Ag)
|
206
|
211
|
|
Ore grade processed (%,
Pb)
|
5.9
|
6.0
|
|
Ore grade processed (%,
Zn)
|
3.2
|
3.4
|
|
Payable zinc equivalent production
(kt)(31)
|
129.9
|
156.3
|
|
Payable silver production
(koz)
|
5,615
|
6,704
|
|
Payable lead production
(kt)
|
49.6
|
58.8
|
|
Payable zinc production
(kt)
|
22.9
|
29.0
|
|
Payable silver sales
(koz)
|
5,469
|
6,529
|
|
Payable lead sales (kt)
|
54.3
|
56.6
|
|
Payable zinc sales (kt)
|
23.0
|
28.3
|
|
Realised silver sales price
(US$/oz)
|
29.4
|
22.5
|
|
Realised lead sales price
(US$/t)
|
1,823
|
1,979
|
|
Realised zinc sales price
(US$/t)
|
2,739
|
2,085
|
|
Operating unit cost
(US$/t ore processed)(61)
|
197
|
150
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
323
|
318
|
|
Underlying EBITDA
|
130
|
147
|
|
Underlying EBIT
|
89
|
109
|
|
Net operating
assets(a)
|
112
|
150
|
|
Capital expenditure
|
23
|
23
|
|
Safe and reliable
|
23
|
23
|
|
Improvement and life extension
|
-
|
-
|
|
Exploration expenditure
|
3
|
5
|
|
Exploration expensed
|
1
|
3
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
CERRO MATOSO
Location: Córdoba,
Colombia
South32 share: 99.9 per
cent
Cerro Matoso is an integrated
nickel laterite mine and smelter located in northern Colombia that
produces ferronickel used to make stainless steel.
In Q2 FY24, we commenced a
strategic review of Cerro Matoso in response to structural changes
in the nickel market that have placed pressure on both nickel
prices and discounts for our ferronickel product. While the
strategic review has identified improvement options that have the
potential to enhance the operation's competitive position, the
expected returns from these investments do not currently support
the allocation of capital in accordance with our capital management
framework and strategy. As a result, we have commenced a process to
investigate the potential divestment of Cerro Matoso. In parallel,
we will continue to target further cost efficiencies to mitigate
the impact of lower planned nickel grades in accordance with the
mine plan.
Volumes
Cerro Matoso payable nickel
production increased by 1% (or 0.2kt) to 18.5kt
in H1 FY25. FY25 production
guidance remains unchanged at 35.0kt.
Operating costs
Operating unit costs decreased by
8%, to US$5.13/lb in H1 FY25, due to cost
efficiencies, lower price-linked royalties and a weaker Colombian
peso.
Our operating margin increased to
16% (H1 FY24: 7%) as our average realised price of nickel increased
by 2% and costs declined.
FY25 Operating unit costs have
been revised to US$5.35/lb (previously US$5.65/lb) reflecting the
realisation of cost efficiencies and a weaker Colombian peso.
Exchange rate and price assumptions for FY25 Operating unit cost
guidance are detailed on page 33, footnote 51.
Financial performance
Underlying EBIT increased by
US$41M, from a loss of US$14M, to US$27M in H1 FY25, as cost efficiencies (+US$22M),
lower price-linked royalties (+US$16M), and a weaker Colombian peso
(+US$5M) more than offset local inflationary pressures
(-US$6M).
Capital expenditure
Capital expenditure was US$13M in H1 FY25 and is expected to
be US$20M in FY25.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Ore mined (kwmt)
|
2,648
|
2,183
|
|
Ore processed (kdmt)
|
1,396
|
1,317
|
|
Ore grade processed (%,
Ni)
|
1.48
|
1.55
|
|
Payable nickel production
(kt)
|
18.5
|
18.3
|
|
Payable nickel sales
(kt)
|
17.7
|
18.0
|
|
Realised nickel sales price
(US$/lb)(62)
|
6.12
|
6.00
|
|
Operating unit cost
(US$/lb)
|
5.13
|
5.57
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
239
|
238
|
|
Underlying EBITDA
|
39
|
17
|
|
Underlying EBIT
|
27
|
(14)
|
|
Net operating
assets(a)
|
97
|
91
|
|
Capital expenditure
|
13
|
21
|
|
Safe and reliable
|
13
|
21
|
|
Improvement and life extension
|
-
|
-
|
|
Exploration expenditure
|
1
|
1
|
|
Exploration expensed
|
1
|
1
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
AUSTRALIA MANGANESE
Location: Northern Territory,
Australia
South32 share: 60 per cent
Australia Manganese consists of
Groote Eylandt Mining Company (GEMCO) in the Northern Territory,
Australia. GEMCO is an open-cut mining operation that produces
high-grade manganese ore.
Volumes
Australia Manganese continued to
implement its operational recovery plan following the impact of
Tropical Cyclone Megan in Q3 FY24.
We continued a substantial
dewatering program which has enabled access to certain mining pits
and a phased restart of mining activities. We resumed production
from the primary concentrator in Q2 FY25 with saleable
production of 639kwmt.
FY25 production guidance remains
unchanged at 1,000kwmt, with production expected to continue at
limited rates in H2 FY25 as we progress the operational recovery
plan and complete further dewatering.
We also progressed the demolition
of undersea structures and commenced installing pilings for the new
wharf. While we have experienced some weather related delays, we
are looking to mitigate these through pilings installation
productivity improvements.
Subject to further potential
impacts from the wet season, export sales are expected to
progressively increase over Q4 FY25.
Australia Manganese has received
external insurance payments of US$250M (100% basis) to
date(34). We continue to work with our insurers to
assess the timing and value of further recoveries in relation to
the impact of Tropical Cyclone Megan.
Financial performance
Underlying EBIT
was a loss of US$34M in H1 FY25 due
to the impact of Tropical Cyclone Megan.
Separately, idle capacity and
other remediation costs (US$74M) and insurance recoveries (US$150M)
were excluded from Underlying EBIT as
earnings adjustments. Our share of costs are
expected to be included in Underlying earnings from Q4 FY25, while
insurance recoveries will continue to be classified as a
significant item in accordance with our accounting
policies.
Depreciation and amortisation
recognised in Underlying earnings decreased by U$55M to US$3M in H1
FY25, with US$39M capitalised to inventory and US$11M recognised as
earnings adjustments. Underlying depreciation and amortisation is
expected to increase in FY26 as we increase sales volumes and
drawdown inventory.
Capital expenditure
Capital expenditure was US$47M in
H1 FY25 and guidance remains unchanged at US$125M in FY25 as we invest in infrastructure to deliver the operational recovery plan.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Manganese ore production
(kwmt)
|
639
|
1,679
|
|
Manganese ore sales
(kwmt)
|
-
|
1,864
|
|
Realised external manganese ore
sales price (US$/dmtu, FOB)(63)(64)
|
-
|
3.79
|
|
Ore operating unit cost (US$/dmtu,
FOB)(64)(65)
|
-
|
2.15
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
-
|
318
|
|
Underlying EBITDA
|
(31)
|
125
|
|
Underlying EBIT
|
(34
|
67
|
|
Net operating
assets(a)
|
248
|
166
|
|
Capital expenditure
|
47
|
40
|
|
Safe and reliable
|
47
|
24
|
|
Improvement and life extension
|
-
|
16
|
|
Exploration expenditure
|
3
|
-
|
|
Exploration expensed
|
3
|
-
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
SOUTH AFRICA MANGANESE
Location: Northern Cape and Gauteng,
South Africa
South32 share: Ore - 54.6 per cent, Alloy -
60 per cent
South Africa Manganese consists of
two manganese mines in the Kalahari Basin, and the Metalloys
manganese alloy smelter which was placed on care and maintenance in
FY20.
In Q4 FY24, South Africa Manganese
entered into a binding agreement to divest the Metalloys manganese
alloy smelter(66). South African competition
approval of the transaction was received in Q2 FY25. The
transaction is expected to complete in Q4 FY25, subject to the
satisfaction of the remaining conditions.
Volumes
South Africa Manganese saleable
production decreased by 3% (or 29kwmt) to 1,082kwmt in H1 FY25, as
we reduced our use of higher cost trucking and undertook a
temporary shut at our Wessels mine in Q2 FY25, in response to
market conditions.
FY25 production guidance remains
unchanged at 2,000kwmt, subject to market conditions.
Operating costs
Operating unit costs increased by
21%, to US$3.13/dmtu in H1 FY25, due to a stronger South African
rand and local inflationary pressures.
Our operating margin increased to
15% (H1 FY24: 11%) as a 27% increase in the average realised price
of manganese more than offset higher costs.
FY25 Operating unit cost guidance
is unchanged at US$3.00/dmtu, with H2 FY25 costs expected to be
lower (from H1 FY25) as we target further cost efficiencies, and
lower price-linked royalties. Exchange rate and price assumptions
for FY25 Operating unit cost guidance are detailed on page
33, footnote
51.
Financial performance
Ore Underlying
EBIT increased by US$13M, to US$19M in H1 FY25, as higher average
realised manganese prices (+US$35M) more than offset a stronger
South African rand (-US$5M), additional planned maintenance
(-US$4M), local inflationary pressures (-US$5M), and an
unfavourable inventory movement (-US$15M).
Capital expenditure
Safe and reliable capital
expenditure was US$16M in H1 FY25 and is expected to be US$30M
(previously US$35M) in FY25 as we invested in rail
infrastructure to improve safety and
efficiencies, and new mobile fleet.
Improvement and life extension
capital expenditure was US$9M in H1 FY25
and is expected to be US$15M in FY25.
|
South32 share
|
H1
FY25
|
H1
FY24
|
|
Manganese ore production
(kwmt)
|
1,082
|
1,111
|
|
Manganese ore sales
(kwmt)
|
1,088
|
1,082
|
|
Realised external manganese ore
sales price (US$/dmtu, FOB)(63)(67)
|
3.85
|
3.03
|
|
Ore operating unit cost (US$/dmtu,
FOB)(65)(67)
|
3.13
|
2.59
|
|
|
|
|
|
South32 share (US$M)
|
H1
FY25
|
H1
FY24
|
|
Underlying revenue
|
191
|
152
|
|
Manganese ore
|
191
|
152
|
|
Manganese alloy
|
-
|
-
|
|
Underlying EBITDA
|
28
|
14
|
|
Manganese ore
|
29
|
17
|
|
Manganese alloy
|
(1)
|
(3)
|
|
Underlying EBIT
|
18
|
3
|
|
Manganese ore
|
19
|
6
|
|
Manganese alloy
|
(1)
|
(3)
|
|
Net operating
assets/(liabilities)(a)
|
191
|
200
|
|
Manganese ore
|
254
|
271
|
|
Manganese alloy
|
(63)
|
(71)
|
|
Capital expenditure
|
25
|
26
|
|
Safe and reliable
|
16
|
20
|
|
Improvement and life extension
|
9
|
6
|
|
Exploration expenditure
|
-
|
-
|
|
Exploration expensed
|
-
|
-
|
(a)
H1 FY24 reflects the balance as at 30 June 2024.
NOTES
|
(1)
|
Members are equity holders of
South32 Limited. Amounts reported as attributable to members are
stated net of amounts attributable to non-controlling
interests.
|
|
(2)
|
Refers to Underlying earnings
attributable to members.
|
|
(3)
|
Refer to market release "Completion
of Illawarra Metallurgical Coal Sale" dated 29 August
2024.
|
|
(4)
|
Net tangible assets as at
31 December 2024 includes all right-of-use assets and lease
liabilities, in accordance with AASB 16 Leases.
|
|
(5)
|
On 29 August 2024, South32 sold
its shareholding in Illawarra Metallurgical Coal to an entity owned
by Golden Energy and Resources Pte Ltd and M Resources Pty Ltd. As
a result, Illawarra Metallurgical Coal was classified as a
discontinued operation in the H1 FY25 and H1 FY24 restated
results.
|
|
(6)
|
Basic earnings per share is
calculated as Profit/(loss) after tax attributable to members
divided by the weighted average number of shares for the period.
Basic Underlying earnings per share is calculated as Underlying
earnings attributable to members divided by the weighted average
number of shares for the period. The weighted average number of
shares for the H1 FY25 is 4,515 million (H1 FY24: 4,523
million).
|
|
(7)
|
H1 FY25 ordinary dividends per
share is calculated as H1 FY25 ordinary dividend announced
(US$154M) divided by the number of shares on issue at
31 December 2024 (4,517 million).
|
|
(8)
|
H1 FY24 and H1 FY25 includes
discontinued operation Illawarra Metallurgical Coal.
|
|
(9)
|
Underlying revenue includes revenue
from third party products and services.
|
|
(10)
|
The underlying information reflects
the Group's interest in material equity accounted joint ventures
and is presented on a proportional consolidation basis.
Underlying EBIT is profit/(loss) before net finance
income/(costs), tax and any earnings adjustments, including
impairments. Underlying EBITDA is Underlying EBIT before Underlying
depreciation and amortisation. Underlying earnings attributable to
members is Profit/(loss) after tax attributable to members and
earnings adjustment items. Underlying earnings attributable to
members is the key measure that South32 uses to assess the
performance of the South32 Group, make decisions on the allocation
of resources and assess senior management's performance. In
addition, the performance of each of the South32 operations and
operational management is assessed based on Underlying EBIT. In
order to calculate Underlying earnings attributable to members,
Underlying EBIT and Underlying EBITDA, the following items are
adjusted as applicable each period, irrespective of
materiality:
• Exchange rate
(gains)/losses on restatement of monetary items;
• Impairment
losses/(reversals);
• Net (gains)/losses
on disposal and consolidation of interests in
operations;
• (Gains)/losses on
non-trading derivative instruments, contingent consideration and
other investments measured at fair value through profit or
loss;
• Major corporate
restructures;
• Joint venture
adjustments;
• Exchange rate
variations on net cash/(debt);
• Tax effect of
earnings adjustments; and
• Exchange rate
variations on tax balances
In addition, items that do not
reflect the underlying operations of South32, and are individually,
or in combination with other related earnings adjustments,
significant to the financial statements, are excluded to determine
Underlying earnings. When applicable, significant items are
detailed in the Financial Information.
|
|
(11)
|
Comprises Underlying EBITDA
excluding third party products and services EBITDA, divided by
Underlying revenue excluding third party products and services
revenue. Also referred to as operating margin.
|
|
(12)
|
Comprises Underlying EBIT excluding
third party products and services EBIT, divided by Underlying
revenue excluding third party products and services
revenue.
|
|
(13)
|
Return on invested capital (ROIC)
is a key measure that South32 uses to assess performance. ROIC is
calculated as Underlying EBIT less the discount on rehabilitation
provisions included in Underlying net finance costs, tax effected
by the Group's Underlying effective tax rate (ETR) including our
material equity accounted investments on a proportional
consolidation basis, divided by the sum of fixed assets (excluding
any rehabilitation assets, the impact of any impairments or
impairment reversals, and unproductive capital) and
inventories.
|
|
(14)
|
Total Recordable Injury Frequency
(TRIF): (The sum of recordable injuries x 1,000,000) ÷ exposure
hours, for employees and contractors. This is stated in units of
per million hours worked for employees and contractors. We adopt
the United States Government Occupational Safety and Health
Administration (OSHA) guidelines for the recording and reporting of
occupational injuries and illnesses.
|
|
(15)
|
Lost Time Injury Frequency (LTIF):
(The sum of Lost Time injuries x 1,000,000) ÷ exposure hours, for
employees and contractors. This is stated in units of per million
hours worked for employees and contractors. We adopt the United
States Government Occupational Safety and Health Administration
(OSHA) guidelines for the recording and reporting of occupational
injuries and illnesses.
|
|
(16)
|
Significant hazard frequency: (The
sum of significant hazards x 1,000,000) ÷ exposure hours. This is
stated in units of per million hours worked for employees and
contractors. A significant hazard is something that has the
potential to cause harm, ill health or injury, or damage to
property, plant or the environment.
|
|
(17)
|
A "Leader" is defined as an
employee occupying a Leadership Role, where a Leadership Role is a
position in the organisational structure flagged as the head of an
organisational unit.
|
|
(18)
|
Local workforce diversity is a
metric consisting of five equally weighted sub-performance metrics
measuring local workforce diversity across the regions in which we
operate. This includes Black People in the total workforce in South
Africa, Black People in Management Roles in South Africa, workforce
in Mozambique, neighbouring community employees hired into
''Unionised Positions" in Colombia, and Aboriginal and Torres
Strait Islander (ATSI) Peoples representation in the Australian
workforce.
|
|
(19)
|
Target is defined as an intended
outcome in relation to which we have identified one or more
pathways for delivery of that outcome, subject to certain
assumptions or conditions. Our target is to halve our operational
greenhouse gas (GHG) emissions by 2035 compared to our FY21
baseline. Further details about the assumptions and conditions on
which our target are based, and our plans to achieve them, are
provided in our 2022 Climate Change Action Plan, available at
www.south32.net. Our operational
decarbonisation pathway consists of three steps: efficiency
initiatives in the near term, transition to lower-carbon energy in
the medium-term, and technology solutions in the longer-term. As
Hillside Aluminium and Worsley Alumina utilise energy sources that
are dependent on fossil fuels, including energy coal, their
decarbonisation is largely tied to a transition to lower-carbon
energy. We continue to work closely with governments and other
stakeholders to transition to lower-carbon energy alternatives at
these operations and have established a framework to integrate just
transition planning into our decarbonisation planning and decision
making to support a fair and equitable transition for our people,
communities and other stakeholders.
|
|
(20)
|
This is a medium-term target as
defined in the Climate Action 100+ Net Zero Company Benchmark
Disclosure Framework Assessment Methodology V2.0 - 2023.
|
|
(21)
|
FY21 baseline adjusted to exclude
GHG emissions from divested operations, including South Africa
Energy Coal, TEMCO, Illawarra Metallurgical Coal and Eagle
Downs.
|
|
(22)
|
Goal is defined as an aspiration
to deliver an outcome for which we have not identified a pathway
for delivery, but for which efforts will be pursued towards
achieving that outcome, subject to certain assumptions or
conditions.
|
|
(23)
|
Excludes third party products and
services EBITDA.
|
|
(24)
|
Refer to market release "Worsley
Mine Development Project Receives State Approval" dated 20 December
2024.
|
|
(25)
|
Refer to market release "Worsley
Mine Development Project Receives Federal Approval" dated 12
February 2025.
|
|
(26)
|
Subject to receipt of any
necessary secondary approvals. The information in this announcement
that refers to Production Target and forecast financial information
for Worsley Alumina is based on Proved (84%) and Probable (16%) Ore
Reserves disclosed in South32 Annual report released on 29 August
2024 and is available to view on www.south32.net. The Ore Reserve estimate underpinning
the Production Target has been prepared by a Competent Person and
reported in accordance with the JORC Code.
|
|
(27)
|
Refers to aluminium produced in a
process that results in less than 4t CO2-e Scope 1 and Scope 2
greenhouse gas (GHG) emissions per tonne of aluminium.
|
|
(28)
|
Production guidance for Hillside
Aluminium and Mozal Aluminium does not assume any load-shedding
impact on production.
|
|
(29)
|
FY25 production guidance was set at
360kt prior to being withdrawn in December 2024. Refer to market
release "Mozal Aluminium Update" dated 10 December 2024.
|
|
(30)
|
Payable copper equivalent
production (kt) was calculated by aggregating revenues from copper,
molybdenum, gold and silver, and dividing the total Revenue by the
price of copper. FY24 realised prices for copper (US$3.86/lb),
molybdenum (US$20.60/lb), gold (US$2,129/oz) and silver
(US$24.8/oz) have been used for FY24, H1 FY25, FY25e and
FY26e.
|
|
(31)
|
Payable zinc equivalent (kt) was
calculated by aggregating revenues from payable silver, lead and
zinc, and dividing the total Revenue by the price of zinc.
FY24 realised prices for zinc (US$2,230/t), lead (US$2,002/t)
and silver (US$24.8/oz) have been used for FY24, H1 FY25, FY25e and
FY26e.
|
|
(32)
|
Refer to market release "Final
Investment Approval to Develop Hermosa's Taylor Deposit" dated 15
February 2024.
|
|
(33)
|
Exploration Results: The
information in this announcement that relates to the Exploration
Results for the Peake deposit is extracted from the market release
"Final Investment Approval to Develop Hermosa's Taylor Deposit"
dated 15 February 2024, and updated for the Peake deposit in the
market release "2024 Full Year Results Presentation" dated 29
August 2024. The information was prepared by D Bertuch, Competent
Person in accordance with the requirements of the JORC Code.
South32 confirms that it is not aware of any new information or
data that materially affects the information included in the
original market announcements. South32 confirms that the form and
context in which the Competent Person's findings are presented have
not been materially changed from the original market
announcements.
|
|
(34)
|
Reflects insurance payments of
US$215M and US$35M received in H1 FY25 and Q3 FY25,
respectively.
|
|
(35)
|
Net distributions from our material
equity accounted investments (manganese and Sierra Gorda) includes
dividends, capital contributions and net repayments/drawdowns of
shareholder loans, which should not be considered as an indication
of or alternative to an IFRS measure of profitability, financial
performance or liquidity.
|
|
(36)
|
Upfront cash proceeds (US$964M)
less transaction costs and cash disposed as part of the sale. A
final adjustment to the purchase price is now expected to be
determined in H2 FY25. The total Transaction consideration includes
deferred cash consideration of US$250M, payable in March 2030, and
contingent price-linked cash consideration of up to
US$350M.
|
|
(37)
|
Since inception of our capital
management program, US$1.8B has been allocated to our on-market
share buy-back (806M shares at an average price of A$3.06 per
share) and US$525M returned in the form of special
dividends.
|
|
(38)
|
Applicable for five years from the
date of completion of the sale of Illawarra Metallurgical Coal,
with no annual cap. The first two years will be calculated and paid
on the second anniversary of completion and annually thereafter.
The contingent price-linked consideration will be calculated as 50%
of incremental metallurgical coal revenue from equity production,
net of royalties, based on the following metallurgical coal price
thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t,
Year 4: US$180/t, Year 5: US$180/t.
|
|
(39)
|
Contingent price-linked
consideration of up to US$500M, payable at threshold copper
production rates and prices in the years 2022 to 2025.
Specifically, 50% of incremental revenue realised above the
following copper price threshold, only where payable copper
production exceeds the agreed threshold: CY25: US$3.80/lb and 158kt
Cu.
|
|
(40)
|
The underlying information reflects
the Group's interest in material equity accounted joint ventures
and is presented on a proportional consolidation basis, which is
the measure used by the Group's management to assess their
performance. The joint venture adjustments reconcile the
proportional consolidation to the equity accounting position
included in the Group's consolidated financial
statements.
|
|
(41)
|
Sales price variance reflects the
revenue impact of changes in commodity prices, based on the current
period's sales volume. Price-linked costs variance reflects the
change in royalties together with the change in input costs driven
by changes in commodity prices or market traded consumables.
Foreign exchange reflects the impact of exchange rate movements on
local currency denominated costs and sales. Sales volume variance
reflects the revenue impact of sales volume changes, based on the
comparative period's sales prices. Controllable costs variance
represents the impact from changes in the Group's controllable
local currency cost base, including the variable cost impact of
production volume changes on expenditure, and period-on-period
movements in inventories. The controllable cost variance excludes
earnings adjustments including significant items.
|
|
(42)
|
Underlying net finance costs and
Underlying income tax expense are actual H1 FY25 results, not
half-on-half variances.
|
|
(43)
|
South32's ownership shares of
operations are presented as follows: Worsley Alumina (86% share),
Brazil Alumina (36% share), Brazil Aluminium (40% share),
Hillside Aluminium (100%), Mozal Aluminium (63.7% share),
Sierra Gorda (45% share), Cannington (100%), Hermosa (100%), Cerro
Matoso (99.9% share), Australia Manganese (60% share), South Africa
Manganese ore (54.6% share) and South Africa Manganese
alloy (60% share). Prior to the divestment of Illawarra
Metallurgical Coal on 29 August 2024, South32's ownership was
100%.
|
|
(44)
|
Underlying ETR is Underlying income
tax expense, including royalty related tax, divided by Underlying
profit subject to tax.
|
|
(45)
|
The corporate tax rates of the
geographies where the Group operates include: Australia 30%, South
Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34% and
Chile 27%.
|
|
(46)
|
Australia Manganese is subject to a
royalty related tax equal to 20% of adjusted EBIT. Sierra Gorda is
subject to a royalty related tax based on the amount of copper sold
and the mining operating margin, the rate is between 5% and 14% for
annual sales over 50kt of refined copper. These royalties are
included in Underlying tax expense.
|
|
(47)
|
Net interest paid excludes amounts
reported as distributions from material equity accounted
investments.
|
|
(48)
|
Total capital expenditure comprises
capital expenditure, capitalised exploration and the purchase of
intangibles. Capital expenditure comprises safe and reliable
capital expenditure, improvement and life extension capital
expenditure (including decarbonisation), and growth capital
expenditure.
|
|
(49)
|
Operating unit cost is Underlying
revenue less Underlying EBITDA, excluding third party products and
services, divided by sales volumes. Operating cost is Underlying
revenue less Underlying EBITDA excluding third party products and
services. Additional manganese disclosures are included in
footnotes 64 and 67.
|
|
(50)
|
FY25 prior Operating unit cost
guidance includes royalties (where appropriate) and the influence
of exchange rates, and includes various assumptions for FY25,
including: an alumina price of US$480/t; a manganese ore price of
US$7.80/dmtu for 44% manganese product; a nickel price of
US$7.50/lb; a silver price of US$27.8/oz; a lead price of
US$2,070/t (gross of treatment and refining charges); a zinc price
of US$2,750/t (gross of treatment and refining charges); a copper
price of US$4.40/lb (gross of treatment and refining charges); a
molybdenum price of US$17.50/lb (gross of treatment and refining
charges); a gold price of US$2,300/oz; an AUD:USD exchange rate of
0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of
4,100; USD:CLP exchange rate of 900; and a reference price for
caustic soda; which reflect forward markets as at August 2024 or
our internal expectations.
|
|
(51)
|
FY25 new Operating unit cost
guidance includes royalties (where appropriate) and the influence
of exchange rates, and includes various assumptions for FY25,
including: an alumina price of US$520/t; a manganese ore price of
US$5.10/dmtu for 44% manganese product; a nickel price of
US$7.10/lb; a silver price of US$30.5/oz; a lead price of
US$2,070/t (gross of treatment and refining charges); a zinc price
of US$3,000/t (gross of treatment and refining charges); a copper
price of US$4.30/lb (gross of treatment and refining charges); a
molybdenum price of US$20.50/lb (gross of treatment and refining
charges); a gold price of US$2,550/oz; an AUD:USD exchange rate of
0.64; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of
4,200; USD:CLP exchange rate of 950; and a reference price for
caustic soda; which reflect forward markets as at February 2025 or
our internal expectations.
|
|
(52)
|
Hermosa growth capital expenditure
guidance excludes lease payments of ~US$25M for self generated
power assets directly attributable to construction of
infrastructure at the Taylor deposit. These self generated power
costs were included in our capital cost estimate provided in market
release "Final Investment Approval to Develop Hermosa's Taylor
Deposit" dated 15 February 2024.
|
|
(53)
|
Exploration Results: The
information in this announcement that relates to the Exploration
Results for Catabela Northeast prospect is extracted from the
market release "Sierra Gorda Site Tour" dated 21 November 2024. The
information was prepared by Miroslaw Wozga and Omar Enrique Cortes
Castro, Competent Persons in accordance with the requirements of
the JORC Code. South32 confirms that it is not aware of any new
information or data that materially affects the information
included in the original market announcement. South32 confirms that
the form and context in which the Competent Person's findings are
presented have not been materially changed from the original market
announcement.
|
|
(54)
|
H1 FY25 Third party products and
services sold comprises US$87M for aluminium, US$6M for alumina,
US$26M for freight services,
US$52M for raw materials and US$19M for manganese.
Underlying EBIT on third party products and services comprises
US$2M for aluminium, US$10M for alumina, US$(2)M for freight
services, nil for raw materials and nil for manganese. H1 FY24
Third party products and services sold comprises US$42M for
aluminium, US$3M for alumina, US$43M for freight services, US$53M
for raw materials and US$15M for manganese. Underlying EBIT on
third party products and services comprises nil for aluminium,
US$2M for alumina, US$(2)M for freight services, nil for raw
materials and nil for manganese.
|
|
(55)
|
Illawarra Metallurgical Coal's H1
FY25 and restated H1 FY24 underlying results include third party
products and services. H1 FY25 Third party products and services
sold was US$28M and Underlying EBIT was nil. H1 FY24 Third party
products and services sold was US$106M and Underlying EBIT was
US$14M.
|
|
(56)
|
Refers to lower levels of GHG
emissions when compared to the current state. Where used in
relation to South32's products or portfolio, it refers to
enhancement of existing methods, practices and technologies to
substantially lower the level of embodied GHG emissions as compared
to the current state.
|
|
(57)
|
The sales volume weighted average
of the Platts Alumina index (FOB) on the basis of a one-month lag
to published pricing (Month minus one or "M-1") was US$577/t in H1
FY25.
|
|
(58)
|
The information in this
announcement that refers to Production Target and forecast
financial information for MRN is based on Proved (8%) and Probable
(1%) Ore Reserves and Measured (91%) Mineral Resources. The Mineral
Resources and Ore Reserves underpinning the Production Target have
been prepared by Competent Persons in accordance with the
requirement of the JORC Code and is available to view in South32's
2024 Annual Report (www.south32.net)
published on 29 August 2024. South32 confirms that all material
assumptions underpinning the Production Target and forecast
financial information derived from the Production Target continues
to apply and have not materially changed.
|
|
(59)
|
Refer to market release "Mozal
Aluminium Update" dated 19 December 2024.
|
|
(60)
|
Presented on a 100%
basis.
|
|
(61)
|
Sierra Gorda and Cannington
Operating unit cost is Underlying revenue less Underlying EBITDA
divided by ore processed. Periodic movements in finished product
inventory may impact Operating unit costs.
|
|
(62)
|
Cerro Matoso realised nickel sales
price is inclusive of by-products.
|
|
(63)
|
Volumes and prices do not include
any third party trading that may be undertaken independently of
equity production. Realised ore prices are calculated as external
sales Underlying revenue less freight and marketing costs, divided
by external sales volume.
|
|
(64)
|
No ore sales in H1 FY25. Manganese
Australia H1 FY24 average manganese content of external ore sales
was 42.5% on a dry basis. 97% of H1 FY24 external manganese ore
sales were completed on a CIF basis. H1 FY24 realised FOB ore
prices and Operating unit costs have been adjusted for freight and
marketing costs of US$30M, consistent with our FOB cost
guidance.
|
|
(65)
|
FOB Ore Operating unit cost is
Underlying revenue less Underlying EBITDA, freight and marketing
costs, divided by ore sales volume.
|
|
(66)
|
Refer to media release "Agreement
to divest Metalloys manganese alloy smelter" dated 13 June
2024.
|
|
(67)
|
Manganese South Africa H1 FY25
average manganese content of external ore sales was 39.0% on a dry
basis (H1 FY24: 38.7%). 89% of H1 FY25 external manganese ore
sales
(H1 FY24: 90%) were completed
on a CIF basis. H1 FY25 realised FOB ore prices and Operating unit
costs have been adjusted for freight and marketing costs of US$30M
(H1 FY24: US$28M), consistent with our FOB cost
guidance.
|
Figures in Italics indicate that an
adjustment has been made since the figures were previously
reported. The denotation (e) refers to an estimate or forecast
year.
The following abbreviations may be
used throughout this report: US$ million (US$M); US$ billion
(US$B); financial year (FY); calendar year (CY); grams per tonne
(g/t); tonnes (t); thousand tonnes (kt); thousand tonnes per annum
(ktpa); million tonnes (Mt); million tonnes per annum (Mtpa);
ounces (oz); thousand ounces (koz); million ounces (Moz); thousand
wet metric tonnes (kwmt); million wet metric tonnes (Mwmt);
thousand dry metric tonnes (kdmt); dry metric tonne unit
(dmtu); pound (lb); megawatt (MW); Australian Securities Exchange
(ASX); London Stock Exchange (LSE); Johannesburg Stock Exchange
(JSE); equity accounted investment (EAI); and American
Depositary Receipts (ADR).
SOUTH32 FINANCIAL
INFORMATION
For the half year ended
31 December 2024
Contents
|
Consolidated income
statement
|
36
|
|
Consolidated statement of
comprehensive income
|
37
|
|
Consolidated balance
sheet
|
38
|
|
Consolidated cash flow
statement
|
39
|
|
Consolidated statement of changes
in equity
|
40
|
|
Notes to financial
statements
|
|
|
1.
|
Reporting entity
|
41
|
|
2.
|
Basis of preparation
|
41
|
|
3.
|
Segment information
|
42
|
|
4.
|
Dividends
|
48
|
|
5.
|
Earnings per share
|
48
|
|
6.
|
Net finance
income/(costs)
|
49
|
|
7.
|
Financial assets and financial
liabilities
|
49
|
|
8.
|
Equity accounted
investments
|
52
|
|
9.
|
Disposal of subsidiaries and joint
operations
|
52
|
|
10.
|
Subsequent events
|
54
|
|
Directors' declaration
|
55
|
|
Directors' report
|
56
|
|
Lead auditor's independence
declaration
|
58
|
|
Independent auditor's review
report
|
60
|
Consolidated income statement
for the half year ended
31 December 2024
|
US$M
|
Note
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Continuing operations
|
|
|
|
|
Revenue:
|
|
|
|
|
Group production
|
|
2,920
|
2,307
|
|
Third party products and
services
|
|
203
|
200
|
|
|
3
|
3,123
|
2,507
|
|
Other income
|
|
62
|
54
|
|
Expenses excluding finance
costs
|
|
(2,745)
|
(2,606)
|
|
Share of profit/(loss) of equity
accounted investments
|
8
|
80
|
(7)
|
|
Operating profit/(loss) from
continuing operations
|
|
520
|
(52)
|
|
Comprising:
|
|
|
|
|
Group production
|
|
510
|
(52)
|
|
Third party products and
services
|
|
10
|
-
|
|
Operating profit/(loss) from
continuing operations
|
|
520
|
(52)
|
|
Finance income
|
|
132
|
115
|
|
Finance costs
|
|
(69)
|
(121)
|
|
Net finance
income/(costs)
|
6
|
63
|
(6)
|
|
Profit/(loss) before tax from
continuing operations
|
|
583
|
(58)
|
|
Income tax
(expense)/benefit
|
|
(210)
|
32
|
|
Profit/(loss) for the period from
continuing operations
|
|
373
|
(26
|
|
|
|
|
|
|
Discontinued operation
|
|
|
|
|
Profit/(loss) after tax from a
discontinued operation
|
9
|
(14)
|
79
|
|
Profit/(loss) for the
period
|
|
359
|
53
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Equity holders of South32
Limited
|
|
360
|
53
|
|
Non-controlling
interests
|
|
(1)
|
-
|
|
|
|
|
|
|
Profit/(loss) for the period from
continuing operations attributable to equity holders of South32
Limited:
|
|
|
|
|
Basic earnings/(loss) per share
(cents)
|
5
|
8.3
|
(0.6)
|
|
Diluted earnings/(loss) per share
(cents)
|
5
|
8.3
|
(0.6)
|
|
|
|
|
|
|
Profit/(loss) for the period
attributable to equity holders of South32 Limited:
|
|
|
|
|
Basic earnings/(loss) per share
(cents)
|
5
|
8.0
|
1.2
|
|
Diluted earnings/(loss) per share
(cents)
|
5
|
8.0
|
1.2
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
The accompanying notes form part
of the half year consolidated financial statements.
Consolidated statement of comprehensive
income
for the half year ended
31 December 2024
|
US$M
|
|
H1
FY25
|
H1
FY24
|
|
Profit/(loss) for the
period
|
|
359
|
53
|
|
Other comprehensive
income
|
|
|
|
|
Items that may be reclassified to the Consolidated income
statement:
|
|
|
|
|
Translation of foreign
operations
|
|
(2)
|
-
|
|
Share of other comprehensive
income/(loss) of equity accounted investments
|
|
2
|
-
|
|
Total items that may be
reclassified to the Consolidated income statement
|
|
-
|
-
|
|
Items that will not be reclassified to the Consolidated
income statement:
|
|
|
|
|
Investments in equity instruments
designated as fair value through other comprehensive income
(FVOCI):
|
|
Net fair value
gains/(losses)
|
|
19
|
(19)
|
|
Income tax
(expense)/benefit
|
|
(6)
|
(1)
|
|
Total items that will not be
reclassified to the Consolidated income statement
|
|
13
|
(20)
|
|
Total other comprehensive
income/(loss)
|
|
13
|
(20)
|
|
Total comprehensive
income/(loss)
|
|
372
|
33
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
Equity holders of South32
Limited
|
|
374
|
33
|
|
Non-controlling
interests
|
|
(2)
|
-
|
The accompanying notes form part
of the half year consolidated financial statements.
Consolidated balance sheet
as at 31 December
2024
|
US$M
|
Note
|
H1
FY25
|
FY24
|
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash
equivalents
|
|
1,600
|
842
|
|
Trade and other
receivables
|
|
714
|
634
|
|
Other financial assets
|
7
|
13
|
1
|
|
Inventories
|
|
1,043
|
985
|
|
Current tax assets
|
|
64
|
69
|
|
Other assets
|
|
45
|
43
|
|
Assets held for sale
|
|
-
|
1,825
|
|
Total current assets
|
|
3,479
|
4,399
|
|
Non-current assets
|
|
|
|
|
Trade and other
receivables
|
|
2,166
|
2,083
|
|
Other financial assets
|
7
|
286
|
89
|
|
Inventories
|
|
63
|
63
|
|
Property, plant and
equipment
|
|
6,661
|
6,503
|
|
Intangible assets
|
|
220
|
221
|
|
Equity accounted
investments
|
|
544
|
396
|
|
Deferred tax assets
|
|
430
|
481
|
|
Other assets
|
|
6
|
10
|
|
Total non-current
assets
|
|
10,376
|
9,846
|
|
Total assets
|
|
13,855
|
14,245
|
|
LIABILITIES
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other
payables
|
|
723
|
805
|
|
Interest bearing
liabilities
|
|
314
|
223
|
|
Current tax payables
|
|
46
|
15
|
|
Provisions
|
|
142
|
179
|
|
Deferred income
|
|
4
|
49
|
|
Liabilities directly associated
with assets held for sale
|
|
-
|
573
|
|
Total current
liabilities
|
|
1,229
|
1,844
|
|
Non-current liabilities
|
|
|
|
|
Trade and other
payables
|
|
-
|
1
|
|
Interest bearing
liabilities
|
|
1,333
|
1,343
|
|
Other financial
liabilities
|
7
|
68
|
17
|
|
Deferred tax
liabilities
|
|
170
|
165
|
|
Provisions
|
|
1,877
|
1,904
|
|
Total non-current
liabilities
|
|
3,448
|
3,430
|
|
Total liabilities
|
|
4,677
|
5,274
|
|
Net assets
|
|
9,178
|
8,971
|
|
EQUITY
|
|
|
|
|
Share capital
|
|
13,187
|
13,216
|
|
Treasury shares
|
|
(21)
|
(43)
|
|
Reserves
|
|
(3,583)
|
(3,575)
|
|
Accumulated losses
|
|
(418)
|
(638)
|
|
Total equity attributable to
equity holders of South32 Limited
|
|
9,165
|
8,960
|
|
Non-controlling
interests
|
|
13
|
11
|
|
Total equity
|
|
9,178
|
8,971
|
The accompanying notes form part
of the half year consolidated financial statements.
Consolidated cash flow statement
for the half year ended
31 December 2024
|
US$M
|
Note
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Operating activities
|
|
|
|
|
Profit/(loss) before tax from
continuing operations
|
|
583
|
(58)
|
|
Profit/(loss) before tax from a
discontinued operation
|
9
|
(3)
|
124
|
|
Adjustments for:
|
|
|
|
|
Significant
items(2)
|
|
(50)
|
48
|
|
Depreciation and amortisation
expense
|
|
255
|
335
|
|
Net impairment loss/(reversal) of
financial assets
|
3
|
71
|
48
|
|
Employee share awards
expense
|
|
10
|
12
|
|
Net finance
(income)/costs
|
|
(60)
|
9
|
|
Share of (profit)/loss of equity
accounted investments
|
|
(80)
|
9
|
|
Net (gains)/losses on disposal of
subsidiaries and joint operations
|
9
|
47
|
-
|
|
Other non-cash or non-operating
items
|
|
(6)
|
(22)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade and other
receivables
|
|
(10)
|
(88)
|
|
Inventories
|
|
(115)
|
(84)
|
|
Trade and other
payables
|
|
(95)
|
(84)
|
|
Provisions and other
liabilities
|
|
(47)
|
(20)
|
|
Cash generated from
operations
|
|
500
|
229
|
|
Interest received
|
|
119
|
49
|
|
Interest paid
|
|
(55)
|
(57)
|
|
Income tax paid
|
|
(116)
|
(96)
|
|
Dividends received
|
|
2
|
2
|
|
Dividends received from equity
accounted investments
|
|
-
|
76
|
|
Net cash flows from operating
activities
|
|
450
|
203
|
|
Investing activities
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(457)
|
(563)
|
|
Exploration expenditure
|
|
(39)
|
(47)
|
|
Exploration expenditure expensed
and included in operating cash flows
|
|
20
|
26
|
|
Purchase of intangible
assets
|
|
(2)
|
-
|
|
Proceeds from sale of intangible
assets
|
|
-
|
18
|
|
Investment in financial
assets
|
|
(21)
|
(84)
|
|
Proceeds from financial
assets
|
|
29
|
42
|
|
Payments for the acquisition of
subsidiaries and joint operations, net of their cash
|
|
(4)
|
(3)
|
|
Proceeds from the disposal of
subsidiaries and joint operations, net of their cash
|
9
|
954
|
-
|
|
Investments in equity accounted
investments
|
|
(63)
|
-
|
|
Net cash flows from investing
activities
|
|
417
|
(611)
|
|
Financing activities
|
|
|
|
|
Proceeds from interest bearing
liabilities
|
|
121
|
149
|
|
Repayment of interest bearing
liabilities
|
|
(59)
|
(110)
|
|
Purchase of shares by Employee
Share Ownership Plan (ESOP) Trusts
|
|
(5)
|
(8)
|
|
Share buy-back
|
|
(29)
|
(35)
|
|
Dividends paid
|
4
|
(140)
|
(145)
|
|
Contributions from non-controlling
interests
|
|
4
|
-
|
|
Net cash flows from financing
activities
|
|
(108)
|
(149)
|
|
Net increase/(decrease) in cash
and cash equivalents
|
|
759
|
(557)
|
|
Cash and cash equivalents, net of
overdrafts, at the beginning of the period
|
|
842
|
1,258
|
|
Effect of foreign exchange rate
changes on cash and cash equivalents
|
|
(1)
|
1
|
|
Cash and cash equivalents, net of
overdrafts, at the end of the period
|
|
1,600
|
702
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
(2)
Includes cash flows from significant items recognised in prior
periods.
The accompanying notes form part
of the half year consolidated financial statements.
Consolidated statement of changes in equity
for the half year ended
31 December 2024
Notes to financial statements - Results for the
period
3. Segment
information continued
(b) Segment results
continued
(i) Underlying results
reconciliation
The following tables reconcile the
underlying segment information to the statutory information
included in the Group's half year consolidated financial
statements:
|
H1 FY25
US$M
|
Continuing operations
|
Discontinued operation(1)
|
Total
|
|
Underlying EBIT
|
613
|
50
|
663
|
|
Joint venture
adjustments(2)(3)
|
(22)
|
-
|
(22)
|
|
Exchange rate gains/(losses) on
restatement of monetary items(4)
|
(4)
|
(3)
|
(7)
|
|
Net impairment (loss)/reversal of
financial assets(4)(5)
|
(71)
|
-
|
(71)
|
|
Net gains/(losses) on the disposal
of subsidiaries and joint operations(1)
|
-
|
(47)
|
(47)
|
|
Gains/(losses) on non-trading
derivative instruments, contingent consideration and other
investments measured at fair value through profit or loss
(FVTPL)(4)(6)
|
4
|
-
|
4
|
|
Operating profit/(loss)
|
520
|
-
|
520
|
|
|
|
|
|
|
Underlying net finance
costs
|
(90)
|
(2)
|
(92)
|
|
Joint venture
adjustments(2)(3)
|
115
|
-
|
115
|
|
Exchange rate variations on net
debt
|
38
|
(1)
|
37
|
|
Net finance
income/(costs)
|
63
|
(3)
|
60
|
|
|
|
|
|
|
Underlying income tax
expense
|
(175)
|
(14)
|
(189)
|
|
Underlying royalty related tax
expense
|
(8)
|
-
|
(8)
|
|
Joint venture adjustments relating
to income tax expense(2)(3)
|
(1)
|
-
|
(1)
|
|
Joint venture adjustments relating
to royalty related tax expense(2)(3)
|
8
|
-
|
8
|
|
Tax effect of other adjustments to
derive Underlying EBIT
|
(1)
|
1
|
-
|
|
Tax effect of other adjustments to
derive Underlying net finance costs
|
(11)
|
-
|
(11)
|
|
Exchange rate variations on tax
balances
|
(22)
|
2
|
(20)
|
|
Income tax
(expense)/benefit
|
(210)
|
(11)
|
(221)
|
|
|
|
|
|
|
Underlying earnings
|
340
|
34
|
374
|
|
Total adjustments to
profit/(loss)
|
33
|
(48)
|
(15)
|
|
Profit/(loss) for the
period
|
373
|
(14)
|
359
|
|
|
|
|
|
|
Underlying earnings attributable
to:
|
|
|
|
|
Equity holders of South32
Limited
|
341
|
34
|
375
|
|
Non-controlling
interests
|
(1)
|
-
|
(1)
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
(2)
The segment information reflects the Group's interest in material
equity accounted joint ventures and is presented on a proportional
consolidation basis, which is the measure used by the Group's
management to assess their performance. Joint venture adjustments
reconcile the proportional consolidation to the statutory equity
accounting positions, recognised in share of profit/(loss) of
equity accounted investments in the Consolidated income
statement.
(3)
The net impact of all joint venture adjustments to the Group's
profit/(loss) for the period amounts to US$100 million of which
US$53 million relates to the Sierra Gorda segment and US$47
million relates to the Australia Manganese segment. The Sierra
Gorda joint venture adjustments include a revaluation gain of US$71
million (US$52 million post-tax) relating to the shareholder loan
payable that was eliminated from the Group's Underlying earnings
upon proportional consolidation. The Australia Manganese joint
venture adjustments include a significant item of US$76 million
(US$48 million post-tax) as outlined in note 3(b)(ii) Significant
items.
(4)
Recognised in expenses excluding finance costs in the Consolidated
income statement.
(5)
Refer to note 3(b)(iii) Impairment of financial assets.
(6)
Includes a gain of US$53 million on the revaluation of the
contingent consideration receivable from the divestment of
Illawarra Metallurgical Coal and a loss of US$50 million on the
revaluation of the contingent consideration payable for the
acquisition of Sierra Gorda.
3. Segment
information continued
(b) Segment results
continued
(i) Underlying results
reconciliation continued
|
H1 FY24
Restated(1)
US$M
|
Continuing operations
|
Discontinued operation(1)
|
Total
|
|
Underlying EBIT
|
106
|
130
|
236
|
|
Joint venture
adjustments(2)(3)
|
(118)
|
-
|
(118)
|
|
Exchange rate gains/(losses) on
restatement of monetary items(4)
|
(10)
|
(3)
|
(13)
|
|
Net impairment (loss)/reversal of
financial assets(4)(5)
|
(48)
|
-
|
(48)
|
|
Gains/(losses) on non-trading
derivative instruments, contingent consideration and other
investments measured at FVTPL(4)
|
18
|
-
|
18
|
|
Operating profit/(loss)
|
(52)
|
127
|
75
|
|
|
|
|
|
|
Underlying net finance
costs
|
(115)
|
(3)
|
(118)
|
|
Joint venture
adjustments(2)(3)
|
110
|
-
|
110
|
|
Exchange rate variations on net
debt
|
(1)
|
-
|
(1)
|
|
Net finance
income/(costs)
|
(6)
|
(3)
|
(9)
|
|
|
|
|
|
|
Underlying income tax
expense
|
(17)
|
(39)
|
(56)
|
|
Underlying royalty related tax
expense
|
(22)
|
-
|
(22)
|
|
Joint venture adjustments relating
to income tax expense(2)(3)
|
18
|
-
|
18
|
|
Joint venture adjustments relating
to royalty related tax expense(2)(3)
|
22
|
-
|
22
|
|
Tax effect of other adjustments to
derive Underlying EBIT
|
3
|
1
|
4
|
|
Tax effect of other adjustments to
derive Underlying net finance costs
|
1
|
-
|
1
|
|
Exchange rate variations on tax
balances
|
27
|
(7)
|
20
|
|
Income tax
(expense)/benefit
|
32
|
(45)
|
(13)
|
|
|
|
|
|
|
Underlying earnings
|
(48)
|
88
|
40
|
|
Total adjustments to
profit/(loss)
|
22
|
(9)
|
13
|
|
Profit/(loss) for the
period
|
(26)
|
79
|
53
|
|
|
|
|
|
|
Underlying earnings attributable
to:
|
|
|
|
|
Equity holders of South32
Limited
|
(48)
|
88
|
40
|
|
Non-controlling
interests
|
-
|
-
|
-
|
(1)
The Illawarra Metallurgical Coal operating segment has been
reclassified as a discontinued operation. Refer to note 9 Disposal
of subsidiaries and joint operations.
(2)
The segment information reflects the Group's interest in material
equity accounted joint ventures and is presented on a proportional
consolidation basis, which is the measure used by the Group's
management to assess their performance. Joint venture adjustments
reconcile the proportional consolidation to the statutory equity
accounting positions, recognised in share of profit/(loss) of
equity accounted investments in the Consolidated income
statement.
(3)
The net impact of all joint venture adjustments to the Group's
profit/(loss) for the year amounts to US$32 million of which US$39
million relates to the Sierra Gorda segment and (US$7) million
relates to the South Africa Manganese segment. The Sierra Gorda
joint venture adjustments include a revaluation gain of US$48
million (US$35 million post-tax) relating to the shareholder loan
payable that was eliminated from the Group's Underlying earnings
upon proportional consolidation.
(4)
Recognised in expenses excluding finance costs in the Consolidated
income statement.
(5)
Refer to note 3(b)(iii) Impairment of financial assets.
3. Segment
information continued
(b) Segment results
continued
(i) Underlying results
reconciliation continued
|
H1 FY25
US$M
|
Group
underlying results
|
Joint
venture adjustments
|
Discontinued operation adjustments(1)
|
Group
statutory results
|
|
Total revenue
|
3,850
|
(583)
|
(144)
|
3,123
|
|
Depreciation and
amortisation
|
355
|
(100)
|
-
|
255
|
|
Share of profit/(loss) of equity
accounted investments
|
(13)
|
93
|
-
|
80
|
|
Exploration
expenditure(2)
|
49
|
(10)
|
-
|
39
|
|
Capital
expenditure(2)
|
635
|
(178)
|
-
|
457
|
|
Equity accounted
investments
|
8
|
536
|
-
|
544
|
|
Total assets
|
14,931
|
(1,076)
|
-
|
13,855
|
|
Total liabilities
|
5,753
|
(1,076)
|
-
|
4,677
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
(2)
The Group statutory results include the cash flows from
discontinued operations, consistent with the Consolidated cash flow
statement.
|
H1 FY24
Restated(1)
US$M
|
Group
underlying results
|
Joint
venture adjustments
|
Discontinued operation adjustments(1)
|
Group
statutory results
|
|
Total revenue
|
3,881
|
(748)
|
(626)
|
2,507
|
|
Depreciation and
amortisation
|
472
|
(137)
|
(60)
|
275
|
|
Share of profit/(loss) of equity
accounted investments
|
(11)
|
2
|
2
|
(7)
|
|
Exploration
expenditure(2)
|
53
|
(6)
|
-
|
47
|
|
Capital
expenditure(2)
|
727
|
(164)
|
-
|
563
|
|
Equity accounted
investments(3)
|
26
|
376
|
(6)
|
396
|
|
Total
assets(3)
|
15,246
|
(1,001)
|
-
|
14,245
|
|
Total
liabilities(3)
|
6,275
|
(1,001)
|
-
|
5,274
|
(1)
The Illawarra Metallurgical Coal operating segment has been
reclassified as a discontinued operation. Refer to note 9 Disposal
of subsidiaries and joint operations.
(2)
The Group statutory results include the cash flows from
discontinued operations, consistent with the Consolidated cash flow
statement.
(3)
Equity accounted investments, total assets and total liabilities
are as at 30 June 2024.
(ii) Significant
items
Significant items are those items,
not separately identified in note 3(b)(i) Underlying results
reconciliation, whose nature and amount are considered significant
to the Group's consolidated financial statements.
The only significant item
recognised within the Group's consolidated financial statements for
the half year ended 31 December 2024 relates to the Tropical
Cyclone Megan impacts at the Groote Eylandt Mining Company Pty Ltd
(GEMCO) operation within the Australia Manganese equity accounted
investment, which is presented on a proportional consolidation
basis in the Group's segment results. The significant item
adjustment is included in the joint venture adjustments in the
Underlying results reconciliation.
Tropical Cyclone Megan
impacts
In March 2024, Tropical Cyclone
Megan severely impacted operations at GEMCO. The weather system
resulted in widespread flooding and significant damage to
infrastructure, including the wharf, port and a critical bridge,
resulting in the temporary suspension of operations. Amounts
incurred directly or indirectly as a result of Tropical Cyclone
Megan, including insurance income, do not reflect the performance
of the underlying operation and have been classified as significant
items.
Australia Manganese recorded a
significant item as a result of Tropical Cyclone Megan of US$76
million (US$48 million post-tax) which was recognised in the
Group's share of profit/(loss) of equity accounted investments in
the Consolidated income statement. The net gain of US$48 million
included insurance income, partially offset by expenses related to
idle capacity charges, repairs and clean-up costs. The net gain of
US$48 million was included in the joint venture adjustments in the
Underlying results reconciliation.
The Group expects to incur further
costs and considers it probable to recover further amounts through
insurance, which will also be classified as significant items. No
contingent asset has been disclosed for any further anticipated
insurance recoveries as a reliable estimate cannot be made at
present.
There were no significant items
within the Group's consolidated financial statements for the half
year ended 31 December 2023.
3. Segment
information continued
(b) Segment results
continued
(iii) Impairment of financial
assets
The Group recognised the following
net impairment of financial assets:
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Trade and other
receivables
|
71
|
48
|
|
Net impairment of financial
assets(1)
|
71
|
48
|
(1)
Relates to the purchased credit impaired receivable from Sierra
Gorda.
Shareholder loan receivable
from Sierra Gorda
The loan has a contractual
interest rate of 8 per cent and the repayment of the loan by Sierra
Gorda is dependent on its financial performance. At
31 December 2024, the Group updated its estimated timing of
the loan repayments and as a result recognised an impairment of
US$71 million (H1 FY24: impairment of US$48 million) which is
included in expenses excluding finance costs in the Consolidated
income statement. The net present value of the expected future cash
flows of the loan were informed by, and are sensitive to, the
Group's copper price assumption, with a range of US$4.37/lb -
US$4.51/lb used, in real terms, and a production profile and costs
based on management's planning processes. An effective interest
rate of 9 per cent, as determined on the date of acquisition, was
applied to discount the future loan repayments.
4.
Dividends
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Prior year final
dividend(1)
|
140
|
145
|
|
Total dividends declared and paid
during the period
|
140
|
145
|
(1)
On 29 August 2024, the Directors resolved to pay a fully franked
final dividend of US 3.1 cents per share (US$140 million) in
respect of the 2024 financial year. The dividend was paid on
17 October 2024.
5. Earnings per
share
Basic earnings/(loss) per share
amounts are calculated based on profit or loss attributable to
equity holders of South32 Limited and the weighted average number
of shares outstanding during the period.
Diluted earnings/(loss) per share
amounts are calculated based on profit or loss attributable to
equity holders of South32 Limited and the weighted average number
of shares outstanding after adjustment for the effects of all
dilutive potential shares.
The following reflects the profit
or loss and share data used in the basic and diluted
earnings/(loss) per share computations:
|
Profit/(loss) attributable to
equity holders
US$M
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Continuing operations
|
374
|
(26
|
|
Discontinued
operation(1)
|
(14)
|
79
|
|
Profit/(loss) attributable to
equity holders of South32 Limited (basic)
|
360
|
53
|
|
Profit/(loss) attributable to
equity holders of South32 Limited (diluted)
|
360
|
53
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
|
Weighted average number of
shares
Million
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Basic earnings/(loss) per share
denominator(2)
|
4,515
|
4,523
|
|
Shares contingently issuable under
employee share ownership plans
|
13
|
-
|
|
Diluted earnings/(loss) per share
denominator(1)
|
4,528
|
4,523
|
(1)
The diluted earnings/(loss) per share calculation for H1 FY24 has
been restated to exclude 14,096,221 shares contingently issuable
under ESOP plans, subject to service and performance conditions,
which are considered anti-dilutive due to the numerator being
restated to reflect a loss from continuing operations, refer to
note 9 Disposal of subsidiaries and joint operations.
(2)
The basic earnings/(loss) per share denominator is the aggregate of
the weighted average number of shares after deduction of the
weighted average number of treasury shares outstanding and shares
permanently cancelled through the on-market share buy-back
program.
|
Earnings/(loss) per
share
US cents
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Continuing operations
|
|
|
|
Basic earnings/(loss) per
share
|
8.3
|
(0.6)
|
|
Diluted earnings/(loss) per
share
|
8.3
|
(0.6)
|
|
Attributable to ordinary equity
holders of South32 Limited
|
|
|
|
Basic earnings/(loss) per
share
|
8.0
|
1.2
|
|
Diluted earnings/(loss) per
share
|
8.0
|
1.2
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
Notes to financial statements - Capital structure and
financing
6. Net finance
income/(costs)
|
US$M
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Finance income
|
|
|
|
Interest on loans to equity
accounted investments
|
91
|
90
|
|
Other interest income
|
41
|
25
|
|
Total finance income
|
132
|
115
|
|
Finance costs
|
|
|
|
Interest on borrowings
|
(29)
|
(35)
|
|
Interest on lease
liabilities
|
(27)
|
(26)
|
|
Discounting on provisions and
other liabilities
|
(49)
|
(58)
|
|
Net interest expense on
post-retirement employee benefits
|
(2)
|
(1)
|
|
Exchange rate variations on net
debt
|
38
|
(1)
|
|
Total finance costs
|
(69)
|
(121)
|
|
Net finance
income/(costs)
|
63
|
(6)
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
7. Financial
assets and financial liabilities
The following table presents the
financial assets and liabilities by class at their carrying
amounts:
|
H1 FY25
US$M
|
Held at
FVTPL
|
Designated as FVOCI
|
Amortised cost
|
Total
|
|
Financial assets
|
|
|
|
|
|
Cash and cash
equivalents
|
-
|
-
|
1,600
|
1,600
|
|
Trade and other
receivables(1)(2)
|
86
|
-
|
550
|
636
|
|
Other financial assets:
|
|
|
|
|
|
Derivative contracts
|
2
|
-
|
-
|
2
|
|
Investments in equity instruments
designated as FVOCI
|
-
|
11
|
-
|
11
|
|
Total current financial
assets
|
88
|
11
|
2,150
|
2,249
|
|
Trade and other
receivables(1)(2)
|
-
|
-
|
2,043
|
2,043
|
|
Other financial assets:
|
|
|
|
|
|
Investments in equity instruments
designated as FVOCI
|
-
|
118
|
-
|
118
|
|
Contingent consideration
receivable
|
168
|
-
|
-
|
168
|
|
Total non-current financial
assets
|
168
|
118
|
2,043
|
2,329
|
|
Total financial assets
|
256
|
129
|
4,193
|
4,578
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other
payables(3)
|
6
|
-
|
706
|
712
|
|
Interest bearing
liabilities
|
-
|
-
|
314
|
314
|
|
Total current financial
liabilities
|
6
|
-
|
1,020
|
1,026
|
|
Interest bearing
liabilities
|
-
|
-
|
1,333
|
1,333
|
|
Other financial
liabilities:
|
|
|
|
|
|
Contingent consideration
payable
|
68
|
-
|
-
|
68
|
|
Total non-current financial
liabilities
|
68
|
-
|
1,333
|
1,401
|
|
Total financial
liabilities
|
74
|
-
|
2,353
|
2,427
|
(1)
Includes current loans to equity accounted investments of
US$50 million and non-current loans to equity accounted
investments of US$1,848 million.
(2)
Excludes current input taxes of US$78 million and non-current input
and other taxes of US$123 million included in other
receivables.
(3)
Excludes current input taxes of US$11 million included in other
payables.
7. Financial
assets and financial liabilities continued
|
FY24
US$M
|
Held at
FVTPL
|
Designated as FVOCI
|
Amortised cost
|
Total
|
|
Financial assets
|
|
|
|
|
|
Cash and cash
equivalents
|
-
|
-
|
842
|
842
|
|
Trade and other
receivables(1)(2)
|
120
|
-
|
403
|
523
|
|
Other financial assets:
|
|
|
|
|
|
Derivative contracts
|
1
|
-
|
-
|
1
|
|
Total current financial
assets
|
121
|
-
|
1,245
|
1,366
|
|
Trade and other
receivables(1)(2)
|
-
|
-
|
1,951
|
1,951
|
|
Other financial assets:
|
|
|
|
|
|
Investments in equity instruments
designated as FVOCI
|
-
|
89
|
-
|
89
|
|
Total non-current financial
assets
|
-
|
89
|
1,951
|
2,040
|
|
Total financial assets
|
121
|
89
|
3,196
|
3,406
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other
payables(3)
|
3
|
-
|
782
|
785
|
|
Interest bearing
liabilities
|
-
|
-
|
223
|
223
|
|
Total current financial
liabilities
|
3
|
-
|
1,005
|
1,008
|
|
Interest bearing
liabilities
|
-
|
-
|
1,343
|
1,343
|
|
Other financial
liabilities:
|
|
|
|
|
|
Contingent consideration
payable
|
17
|
-
|
-
|
17
|
|
Total non-current financial
liabilities(3)
|
17
|
-
|
1,343
|
1,360
|
|
Total financial
liabilities
|
20
|
-
|
2,348
|
2,368
|
(1)
Includes current loans to equity accounted investments of
US$73 million and non-current loans to equity accounted
investments of US$1,933 million.
(2)
Excludes current input taxes of US$111 million and non-current
input and other taxes of US$132 million included in other
receivables.
(3)
Excludes current input taxes of US$20 million and non-current input
and other taxes of US$1 million included in other
payables.
(i) Fair value
measurement
The carrying values of the Group's
financial assets and liabilities measured at amortised cost are
equal to or approximate their respective fair values, except for
senior unsecured notes with a carrying value of US$692 million
(FY24: US$692 million), which have a fair value of US$643 million
(FY24: US$636 million), and lease liabilities with a carrying value
of US$660 million (FY24: US$672 million), for which a fair value
has not been determined. The fair value of the Group's senior
unsecured notes is estimated based on quoted market prices at the
reporting date and are classified as Level 1 on the fair value
hierarchy as shown below.
For financial assets and
liabilities measured at fair value, the Group uses quoted marked
prices in active markets for identical assets where available.
Where no price information is available from a quoted market
source, alternative market mechanisms or recent comparable
transactions, the fair value is estimated based on the Group's
views on relevant future prices, net of valuation allowances to
accommodate liquidity, modelling, credit and other risks implicit
in such estimates.
The following table shows the
Group's financial assets and liabilities carried at fair value with
reference to the nature of valuation inputs
used:
|
Level 1
|
Valuation is based on unadjusted
quoted prices in active markets for identical financial assets and
liabilities.
|
|
Level 2
|
Valuation is based on inputs
(other than quoted prices included in Level 1) that are observable
for the financial asset or liability, either directly (i.e. as
unquoted prices) or indirectly (i.e. derived from
prices).
|
|
Level 3
|
Valuation includes inputs that are
not based on observable market data.
|
7. Financial assets and financial liabilities continued
(i) Fair value
measurement continued
|
H1 FY25
US$M
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
Financial assets and
liabilities
|
|
|
|
|
|
Trade and other
receivables
|
-
|
86
|
-
|
86
|
|
Trade and other
payables
|
-
|
(6)
|
-
|
(6)
|
|
Derivative contract
assets
|
2
|
-
|
-
|
2
|
|
Investments in equity instruments
designated as FVOCI
|
119
|
-
|
10
|
129
|
|
Contingent consideration
receivable
|
-
|
-
|
168
|
168
|
|
Contingent consideration
payable
|
-
|
-
|
(68)
|
(68)
|
|
Total
|
121
|
80
|
110
|
311
|
|
FY24
US$M
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
Financial assets and
liabilities
|
|
|
|
|
|
Trade and other
receivables
|
-
|
120
|
-
|
120
|
|
Trade and other
payables
|
-
|
(3)
|
-
|
(3)
|
|
Derivative contract
assets
|
1
|
-
|
-
|
1
|
|
Investments in equity instruments
designated as FVOCI
|
80
|
-
|
9
|
89
|
|
Contingent consideration
payable
|
-
|
-
|
(17)
|
(17)
|
|
Total
|
81
|
117
|
(8)
|
190
|
The following table shows the
movements in the Group's Level 3 financial assets and
liabilities:
|
US$M
|
H1
FY25
|
H1
FY24
|
|
At the beginning of the
period
|
(8)
|
(20)
|
|
Addition of financial
assets
|
115
|
-
|
|
Net unrealised gains/(losses)
recognised in the Consolidated income
statement(1)
|
3
|
19
|
|
At the end of the
period(2)
|
110
|
(1)
|
(1)
Recognised in expenses excluding finance costs in the Consolidated
income statement.
(2)
The fair value of the Level 3 financial assets and liabilities are
determined using appropriate valuation models, including discounted
cash flow modelling, with inputs such as forecast commodity prices
and production volumes. The only Level 3 input which is considered
significant to the fair value measurement of these financial assets
and liabilities is the forecast metallurgical coal prices used in
the determination of the contingent consideration receivable from
the divestment of Illawarra Metallurgical Coal. The effect of using
reasonably possible alternative metallurgical coal prices in the
fair value calculation, based on changing this assumption
favourably or unfavourably by 10 per cent while holding all other
variables constant, is an increase of US$72 million, or a decrease
of US$166 million respectively, to the Group's profit/(loss) after
tax in the Consolidated income statement.
Notes to financial statements - Other notes
8. Equity
accounted investments
The Group's material interests in
equity accounted investments are as follows:
|
|
|
|
Ownership interest %
|
|
Material joint ventures
|
Country of
incorporation
|
Principal activity
|
H1
FY25
|
FY24
|
|
Australia
Manganese(1)(2)
|
Australia
|
Manganese ore mine
|
60
|
60
|
|
South Africa
Manganese(1)(3)
|
South Africa
|
Manganese ore mines
|
60
|
60
|
|
Manganese
Marketing(1)(4)
|
Singapore
|
Sales, marketing and
distribution
|
60
|
60
|
|
Sierra
Gorda(1)(5)
|
Chile
|
Copper mine
|
45
|
45
|
(1)
Joint control is contractually achieved as joint venture parties
unanimously consent on decisions over the joint venture's relevant
activities.
(2)
Australia Manganese consists of an investment in GEMCO.
(3)
The Group holds a 60 per cent interest in Samancor Holdings (Pty)
Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel
Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect
legal ownership interest of 44.4 per cent. The remaining 26 per
cent of HMM is owned by B-BBEE entities, of which 17 per cent of
the interests were acquired using vendor finance, with the loans
repayable via distributions attributable to these parties, pro rata
to their share in HMM. Until these loans are repaid, the Group's
interest in HMM is accounted for at 54.6 per cent.
(4)
Manganese Marketing consists of an investment in Samancor Marketing
Pte Ltd.
(5)
Sierra Gorda consists of an investment in Sierra Gorda Sociedad
Contractual Minera.
|
Share of profit/(loss) of equity
accounted investments
US$M
|
H1
FY25
|
H1
FY24
Restated(1)
|
|
Australia Manganese
|
7
|
7
|
|
South Africa Manganese
|
7
|
(12)
|
|
Manganese Marketing
|
(1)
|
4
|
|
Sierra Gorda
|
80
|
3
|
|
Individually immaterial
|
(13)
|
(9)
|
|
Total
|
80
|
(7)
|
(1)
Refer to note 9 Disposal of subsidiaries and joint
operations.
9. Disposal of
subsidiaries and joint operations
Non-current assets and disposal
groups (inclusive of directly associated liabilities) are
reclassified to current assets held for sale if their carrying
amount is highly probable to be recovered through sale rather than
through continuing use, and are available for immediate sale in
their present condition.
A discontinued operation is a
component of the Group's business that represents a separate major
line of business or geographical area of operations that has been
disposed of or is classified as held for sale. When an operation is
classified as discontinued, the comparative financial results are
restated as if the operation had been discontinued from the start
of the comparative period.
Illawarra Metallurgical
Coal
In February 2024, the Group
announced its decision to enter into a binding agreement for the
sale of its shareholding in Illawarra Metallurgical Coal to an
entity owned by Golden Energy and Resources Pte Ltd (GEAR) and M
Resources Pty Ltd (M Resources). The sale completed on 29 August
2024 and resulted in a loss on disposal of US$47 million. The sale consideration included an
upfront and deferred cash consideration of US$1,300 million and
contingent price-linked consideration of up to US$350 million. The
consideration is subject to customary working capital, net debt and
capital expenditure adjustments that is expected to be finalised
during H2 FY25.
Illawarra Metallurgical Coal was
classified as held for sale and presented separately on the Group's
FY24 Consolidated balance sheet. The disposal group represents the
entire Illawarra Metallurgical Coal segment, which comprises
Illawarra Coal Holdings Pty Ltd and its subsidiaries, a 16.7 per
cent interest in the Port Kembla Coal Terminal, and certain
associated external contractual arrangements held by South32
Marketing Pte Ltd which were novated to Illawarra Metallurgical
Coal prior to completion. As a separate major component of the
Group, Illawarra Metallurgical Coal has also been presented as a
discontinued operation in the Group's Consolidated income
statement.
9. Disposal of
subsidiaries and joint operations continued
The results of the discontinued
operation are as follows:
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Revenue:
|
|
|
|
Group production
|
116
|
520
|
|
Third party products and
services
|
28
|
106
|
|
|
144
|
626
|
|
Other income
|
-
|
7
|
|
Expenses excluding finance
costs
|
(97)
|
(504)
|
|
Profit/(loss) on disposal of the
discontinued operation
|
(47)
|
-
|
|
Share of profit/(loss) of equity
accounted investments
|
-
|
(2)
|
|
Operating profit/(loss) from a
discontinued operation
|
-
|
127
|
|
Finance income
|
-
|
1
|
|
Finance costs
|
(3)
|
(4)
|
|
Net finance
income/(costs)
|
(3)
|
(3)
|
|
Profit/(loss) before tax from a
discontinued operation
|
(3)
|
124
|
|
Income tax
(expense)/benefit
|
(11)
|
(45)
|
|
Profit/(loss) for the period from
a discontinued operation
|
(14)
|
79
|
|
|
|
|
|
Total comprehensive income/(loss)
from a discontinued operation attributable to the equity holders of
South32 Limited
|
(14)
|
79
|
|
|
|
|
|
Basic earnings/(loss) per share
(cents)
|
(0.3)
|
1.8
|
|
Diluted earnings/(loss) per share
(cents)
|
(0.3)
|
1.8
|
The cash flows from the
discontinued operation are as follows:
|
US$M
|
H1
FY25
|
H1
FY24
|
|
Net cash flows from operating
activities
|
86
|
179
|
|
Net cash flows from investment
activities
|
880
|
(185)
|
|
Net cash flows from financing
activities
|
(1)
|
(2)
|
The effect of disposal on the
results and financial position of the Group is as
follows:
|
US$M
|
H1
FY25
|
|
Consideration
|
|
|
Upfront consideration, net of
transaction costs
|
1,010
|
|
Deferred
consideration(1)
|
170
|
|
Contingent price-linked
consideration(2)
|
115
|
|
Total consideration
|
1,295
|
|
Net assets disposed of
|
|
|
Cash and cash
equivalents
|
17
|
|
Trade and other
receivables
|
94
|
|
Inventories
|
166
|
|
Property, plant and
equipment
|
1,577
|
|
Equity accounted
investments
|
6
|
|
Other assets
|
10
|
|
Trade and other
payables
|
(199)
|
|
Interest bearing
liabilities
|
(31)
|
|
Provisions
|
(278)
|
|
Deferred tax
liabilities
|
(20)
|
|
Total net assets disposed
of
|
1,342
|
|
Net gain/(loss) on
disposal
|
(47)
|
|
|
|
|
Consideration received, net of
transaction costs, satisfied in cash
|
955
|
|
Cash and cash equivalents disposed
of
|
(17)
|
|
Net cash inflow
|
938
|
(1)
Present value of the US$250 million deferred consideration payable
in March 2030, recognised in trade and other receivables on the
Consolidated balance sheet.
(2)
Fair value of the contingent price-linked consideration, recognised
in other financial assets on the Consolidated balance sheet. The
contingent consideration is payable at 50 per cent of incremental
metallurgical coal revenue above certain price thresholds, capped
at US$350 million over a five year period.
9. Disposal of
subsidiaries and joint operations continued
Eagle Downs Metallurgical
Coal
In February 2024, the Group
announced its decision to enter into a binding agreement to sell
its 50 per cent interest in Eagle Downs Metallurgical Coal to a
subsidiary of Stanmore Resources Limited. The sale completed on 12
August 2024 and did not result in a gain or loss on disposal. The
sale consideration included upfront consideration of US$15 million,
adjusted for customary working capital and net debt, a contingent
payment of US$20 million subject to the project reaching
metallurgical coal production of 100,000 tonnes, and a price-linked
royalty of up to US$100 million.
Eagle Downs Metallurgical Coal was
classified as held for sale and presented separately on the Group's
FY24 Consolidated balance sheet. Eagle Downs Metallurgical Coal is
not considered a separate major component of the Group and
therefore was not classified as a discontinued operation, with its
results remaining within continuing operations in the Group's
Consolidated income statement.
The effect of disposal on the
results and financial position of the Group is as
follows:
|
US$M
|
H1
FY25
|
|
Consideration
|
|
|
Upfront consideration, net of
transaction costs
|
16
|
|
Total consideration
|
16
|
|
Net assets disposed of
|
|
|
Property, plant and
equipment
|
31
|
|
Interest bearing
liabilities
|
(8)
|
|
Provisions
|
(7)
|
|
Total net assets disposed
of
|
16
|
|
Net gain/(loss) on
disposal
|
-
|
|
|
|
|
Consideration received, net of
transaction costs, satisfied in cash
|
16
|
|
Net cash inflow
|
16
|
10. Subsequent
events
Capital
management
On 13 February 2025, the Directors
resolved to pay a fully-franked interim dividend of US 3.4 cents
per share (US$154 million) in respect of the 2025 financial half
year. The dividend will be paid on 3 April 2025. The dividend
has not been provided for in the half year consolidated financial
statements and will be recognised in the second half of the 2025
financial year.
No other matters or circumstances
have arisen since the end of the period that have significantly
affected, or may significantly affect, the operations, results of
operations or state of affairs of the Group in subsequent
accounting periods.
Directors' declaration
In accordance with a resolution of
the Directors of the Company, we state that:
In the opinion of the
Directors:
(a) The
consolidated financial statements and notes that are set out on
pages 36 to 54 for
the half year ended 31 December 2024 are in accordance with
the Corporations Act, including:
(i) Giving
a true and fair view of the Group's financial position as at
31 December 2024 and of its performance for the half year
ended on that date; and
(ii) Complying
with Australian Accounting Standard AASB 134 Interim Financial Reporting and
Corporations Regulations 2001.
(b) There are
reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
Signed in accordance with a
resolution of the Board of Directors.
Karen Wood
Chair
Graham Kerr
Chief Executive Officer and Managing Director
Dated 13 February
2025
Directors' report
The Directors of the Group present
the consolidated financial statements for the half year ended
31 December 2024 and the auditor's review report
thereon.
Directors
The Directors of the Company, both
during and since the end of the period, are:
Ms Karen Wood
Mr Graham Kerr
Mr Frank Cooper AO
Dr Xiaoling Liu
Mr Carlos Mesquita
Dr Ntombifuthi (Futhi)
Mtoba
Ms Jane Nelson
Mr Wayne Osborn
Mr Keith Rumble (retired 24
October 2024)
Ms Sharon Warburton
Mr Stephen Pearce (appointed 1
February 2025)
Ms Mandlesilo (Mandla) Msimang
(appointed 1 February 2025)
The company secretary of the
Company, both during and since the end of the period, is Claire
Tolcon.
Review and results of
operations
A review of the operations of the
consolidated entity during the period and of the results of those
operations is contained on pages 3
to 33.
Strategic risks and
uncertainties
Due to the international scope of
the Group's operations and the industries in which it is engaged,
there are a number of risk factors and uncertainties which could
have an effect on the Group's results and operations over the next
six months.
The following information outlines
the most significant strategic exposures identified across the
Group. The risks are not listed in any particular order:
- Keeping our people safe
and well
- Portfolio
reshaping
- Climate change and
environment
- Maintaining, realising
or enhancing the value of our Mineral Resources and Ore
Reserves
- Major external events
or natural catastrophes
- Maintaining
competitiveness through technology and innovation
- Predictable operational
performance
- Delivering our project
portfolio
- Supply chain
security
- Shaping our culture and
managing diverse talent
- Evolving societal
expectations
- Political risks,
actions by government and/or authorities
- Global economic
uncertainty and liquidity
Further information on these risks
and how they are managed can be found on pages 29 to 38 of the
Annual Report for the year ended 30 June 2024, a copy of which
is available on the Group's website at www.south32.net.
Events subsequent to the balance
sheet date
Refer to note 10 Subsequent
events to the consolidated financial
statements on page 54.
No other matters or circumstances
have arisen since the end of the period that have significantly
affected, or may significantly affect, the operations, results of
operations or state of affairs of the Group in subsequent
accounting periods.
UK responsibility
statements
The Directors state that to the
best of their knowledge the Financial Results and Outlook on
pages 3 to
33 is compliant with DTR
4.2.7R and DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules in the United Kingdom, namely:
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(a)
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Includes an indication of
important events that have occurred during the first six months of
the financial year, and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
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(b)
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Disclosure has been made for
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the enterprise
during that period, and any changes in the related party
transactions described in the last annual report that could have a
material effect on the financial position or performance of the
enterprise in the first six months of the current financial
year.
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Lead Auditor's Independence
Declaration
A copy of the lead auditor's
independence declaration as required under Section 307C of the
Corporations Act is set out on page 58.
Rounding of amounts
The Australian Securities and
Investments Commission (ASIC) Corporations (Rounding in
Financial/Directors' Reports) Instrument 2016/191 applies to the
Group and amounts in the half year consolidated financial
statements and this Directors' Report have been rounded in
accordance with this instrument to the nearest million US dollars,
unless stated otherwise.
This Directors' Report is made in
accordance with a resolution of the Board.
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Karen Wood
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Graham Kerr
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Chair
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Chief Executive Officer and
Managing Director
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Dated 13 February
2025
KPMG
Lead Auditor's Independence
Declaration under
Section 307C of the Corporations
Act 2001
To
the Directors of South32 Limited
I declare that, to the best of my
knowledge and belief, in relation to the review of South32 Limited
for the half year ended 31 December 2024 there have
been:
i.
no contraventions of the auditor independence requirements as set
out in the Corporations Act
2001 in relation to the review; and
ii.
no contraventions of any applicable code of professional conduct in
relation to the review.
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KPMG
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Jane Bailey
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Partner
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Perth
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13 February 2025
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KPMG, an Australian partnership and
a member firm of the KPMG global organisation of independent member
firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent
member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards
Legislation.
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KPMG
Independent Auditor's Review Report
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To
the shareholders of South32 Limited
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Conclusion
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We have reviewed the accompanying
Half-year Consolidated Financial Statements of
South32 Limited.
Based on our review, which is not
an audit, we have not become aware of any matter that makes us
believe that the Half-year Consolidated Financial Statements of
South32 Limited does not comply with the Corporations Act 2001,
including:
•
Giving a true and fair view of the Group's
financial position as at 31 December
2024 and of its performance for the Half-year ended on
that date; and
•
Complying with Australian
Accounting Standard AASB 134 Interim Financial Reporting and
the Corporations Regulations
2001.
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The Half-year Consolidated
Financial Statements comprises:
•
Consolidated balance sheet as at 31 December
2024;
•
Consolidated income statement, Consolidated statement of
comprehensive income, Consolidated statement of changes in equity
and Consolidated cash flow statement for the Half-year ended on
that date;
•
Notes 1 to 10 comprising a summary of
material accounting policies and other explanatory information;
and
• The
Directors' Declaration.
The Group comprises
South32 Limited (the Company) and the entities it controlled at the
Half year's end or from time to time during the
Half-year.
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Basis for Conclusion
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We conducted our review in
accordance with ASRE 2410 Review
of a Financial Report Performed by the Independent Auditor of the
Entity and ISRE 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity. Our
responsibilities are further described in the Auditor's Responsibilities for the Review of
the Financial Report section of our report.
We are independent of the Group in
accordance with the auditor independence requirements of the
Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are
relevant to our audit of the annual financial report in Australia.
We have also fulfilled our other ethical responsibilities in
accordance with these requirements.
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Responsibilities of the Directors for the Half-year
Consolidated Financial Statements
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The Directors of the Company are
responsible for:
• The
preparation of the Half-year Consolidated Financial Statements that
gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001;
and
•
Such internal control as the Directors determine is necessary to
enable the preparation of the Half-year Consolidated Financial
Statements that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
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Auditor's Responsibilities for the Review of the Half-year
Consolidated Financial Statements
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Our responsibility is to express a
conclusion on the Half-year Consolidated Financial Statements based
on our review. ASRE 2410 and ISRE 2410 require us to conclude
whether we have become aware of any matter that makes us believe
that the Half-year Consolidated Financial Statements does not
comply with the Corporations Act 2001 including giving a true and
fair view of the Group's financial position as at 31 December 2024 and its performance for the
Half-Year ended on that date, and complying with Australian Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations
2001.
A review of Half-year Consolidated
Financial Statements consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance
with Australian Auditing Standards and consequently does not enable
us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
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KPMG
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Jane Bailey
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Partner
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Perth
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13 February 2025
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Forward-looking
statements
This release contains
forward-looking statements, including statements about trends in
commodity prices and currency exchange rates; demand for
commodities; production forecasts; plans, strategies and objectives
of management; capital costs and scheduling; operating costs;
anticipated productive lives of projects, mines and operations; and
provisions and contingent liabilities. These forward-looking
statements reflect expectations at the date of this release,
however they are not guarantees or predictions of future
performance. They involve known and unknown risks, uncertainties
and other factors, many of which are beyond our control, and which
may cause actual results to differ materially from those expressed
in the statements contained in this release. Readers are cautioned
not to put undue reliance on forward-looking statements. Except as
required by applicable laws or regulations, the South32 Group does
not undertake to publicly update or review any forward-looking
statements, whether as a result of new information or future
events. Past performance cannot be relied on as a guide to future
performance. South32 cautions against reliance on any forward
looking statements or guidance.
Non-IFRS financial
information
This release includes certain
non-IFRS financial measures, including Underlying earnings,
Underlying EBIT and Underlying EBITDA, Underlying revenue,
Underlying net finance costs, Underlying depreciation and
amortisation, Underlying operating costs, Underlying income tax
expense, Underlying royalty related tax expense, Basic Underlying
earnings per share, Underlying effective tax rate, Underlying EBIT
margin, Underlying EBITDA margin, Underlying return on capital,
Free cash flow, net debt, net operating assets and ROIC. These
measures are used internally by management to assess the
performance of our business, make decisions on the allocation of
our resources and assess operational management. Non-IFRS measures
have not been subject to audit or review and should not be
considered as an indication of or alternative to an IFRS measure of
profitability, financial performance or liquidity.
No offer of securities
Nothing in this release should be
read or understood as an offer or recommendation to buy or sell
South32 securities, or be treated or relied upon as a
recommendation or advice by South32.
No financial or investment advice
- South Africa
South32 does not provide any
financial or investment 'advice' as that term is defined in the
South African Financial Advisory and Intermediary Services Act, 37
of 2002, and we strongly recommend that you seek professional
advice.
FURTHER INFORMATION
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Investor relations
Ben Baker
M +61 403 763 086
E
Ben.Baker@south32.net
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Media relations
Jamie Macdonald
M +61 408 925 140
E
Jamie.Macdonald@south32.net
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Miles Godfrey
M +61 415 325 906
E
Miles.Godfrey@south32.net
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Further information on South32 can
be found at www.south32.net.
South32 Limited (ABN 84 093 732
597)
Registered in Australia
(Incorporated in Australia under
the Corporations Act 2001)
Registered Office: Level 35, 108
St Georges Terrace
Perth Western Australia 6000
Australia
ISIN: AU000000S320
Approved
for release by Graham Kerr, Chief Executive Officer
JSE
Sponsor: The Standard Bank of South Africa Limited
13 February 2025
