South32 has leveraged strong commodity prices and a stable operating environment to post several record results in the 2021–22 financial year (FY22).
The major miner posted record underlying earnings of $US2.6 billion ($3.76 billion) – a 432 per cent jump from FY21 ($US489 million) – along with a 156 per cent increase in underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) to $US4.76 billion ($6.87 billion).
The company’s underlying revenue was $US10.6 billion ($15.3 billion), up 45 per cent on FY21 ($US7.3 billion).
South32 achieved record free cash flow of $US2.6 billion, which it said was particularly influential in boosting its internal investment and increasing its exposure to metals critical for a low-carbon future.
The company acquired a 45 per cent stake in the Sierra Gorda copper mine in Chile in FY22, realising it needed to add copper to its portfolio.
South32 shareholders received a record $US1.3 billion ($1.88 billion) of returns in FY22, which is 10 per cent of the miner’s market capitalisation.
Chief executive officer Graham Kerr said the record-setting FY22 performance was built on the company’s strong operational performance.
“We achieved record production at Worsley Alumina, while Hillside Aluminium and Mozal Aluminium continued to test maximum technical capacity,” he said.
“At Cannington we exceeded production guidance as we transitioned to a new mine configuration, bringing forward higher-grade material and at Cerro Matoso we achieved a 22 per cent increase in nickel production.”
The Worsley alumina project in Western Australia produced 3.99 million tonnes (Mt) of alumina in FY22 – which was above nameplate capacity – and South32 expects the operation to produce 4Mt of alumina in FY23 and FY24.
The Cannington mine in Queensland produced 224,200 tonnes of a zinc equivalent product, 12.95 million ounces of silver and 120,600 tonnes of lead in FY22. South32 expects Cannington to achieve even higher production levels in FY23 and beyond.
Kerr said South32 was well placed to navigate the current economic uncertainty.
“We have a strong balance sheet with net cash of $US538 million ($777 million) after funding our new investments during the year, while our ongoing focus on cost management and an expected 14 per cent increase in production will mitigate industry-wide cost inflation.
“We have repositioned our portfolio toward metals critical for a low-carbon future, having already established a pipeline of high-quality development options.”