22/08/2019 - 11:17

South32 profit falls by a quarter

22/08/2019 - 11:17

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South32 has announced it is in talks to sell its struggling South African energy-coal business to Seriti Resources, but its Worsley alumina operations performed strongly.

South32 profit falls by a quarter
The Worsley alumina operations achieved underlying earnings growth of 28.2 per cent.

South32 has announced it is in talks to sell its struggling South African energy-coal business to Seriti Resources, but its Worsley alumina operations performed strongly.

The miner said today it booked a charge of $US504 million related to its South African energy-coal division, which it has been running as a separate unit since April 2018 in preparation for a sale.

The sale represents a shift from coal for the miner at a time when investor pressure and climate change concerns are prompting companies to limit their exposure to fossil fuels.

In June, Reuters reported that Norway's $US1 trillion ($A1.5 trillion) sovereign wealth fund may have to sell its stake in South32, worth about $US266 million, to meet tighter ethical investing rules adopted by the country's parliament.

South32’s underlying net profit, which excludes the impact of one-off items, came in at $US992 million for the year ended June 30, compared with $US1.33 billion a year earlier, hit by lower aluminium prices due to slowing growth in China and the Sino-US trade war.

Analysts expected a profit of $US1.04 billion, according to IBES data from Refinitiv.

Its Worsley alumina operations achieved underlying earnings growth of 28.2 per cent to $541 million, as it continues to ramp-up operations at the site.

South32 will pay a final dividend of US2.8 cents a share, fully franked.

Shares in South 32 were down 1.45 per cent to $2.71 each at 11.45am AEST.

Six months ago, its shares were trading at $3.83 each.

 

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