South32 has more than doubled its underlying earnings for the 2020-21 financial year following record performance at its alumina and manganese assets in Australia.
The company earned $US6.3 million ($8.8 million) for the year, up 4 per cent from the previous period.
“Reflecting our strong financial position and disciplined approach to capital management, the board has resolved to pay a US$164 million fully franked final ordinary dividend in respect of the (second half of the 2021 financial year) and a US$93 million fully franked special dividend,” South32 chief executive officer Graham Kerr said.
“The board has also resolved to further expand our capital management program by US$120 million to US$2 billion, leaving US$252 million to be returned to shareholders by 2 September 2022.”
South32’s Worsley Alumina operation in Western Australia produced 3.9 million tonnes of alumina, the highest-ever result for the refinery.
Record numbers were also achieved at the Australia Manganese operation, where South32 produced 3.5 million wet metric tonnes.
South32 has an 86 per cent interest in Worsley and a 60 per cent interest in Australia Manganese.
The company’s Brazil Alumina operation also achieved record production of 1.39 million tonnes, however this is expected to decline in the next annual report due to repair work on one of the site’s bauxite ship loaders.
Kerr said the company has risen above the challenges of the COVID-19 pandemic.
“We delivered a strong operating result, despite the ongoing challenges of COVID-19, achieving record production at Worsley Alumina, Brazil Alumina and Australia Manganese,” Kerr said.
“During the year, we made substantial progress reshaping our portfolio, completing the divestments of South Africa Energy Coal, the TEMCO manganese alloy smelter and a portfolio of non-core precious metals royalties.
“This simplifies our business, reduces capital intensity and will improve our underlying operating margin.”
The company also surpassed its guidance at the Cannington zinc mine operation in Queensland, producing 380,000 tonnes.
South32’s Illawarra metallurgical coal operation in New South Wales increased production by 9 per cent to 7.6 million tonnes due to the return of a three-longwall configuration at the operation.
“While total saleable coal production is expected to decline by 0.3 million tonnes to 7.3 million tonnes in the 2022 financial year, with three longwall moves scheduled across the year, metallurgical coal production is expected to increase by 2 per cent to 6.3 million tonnes,” South32 stated.