South32 nears annual cost targets but posts a US$1.62 bln net loss

<p>Mining giant BHP Billiton spin-off South32 posted a net loss of $US1.62 billion ($A2.13 billion) in the full year ending July 31 vis-a-vis a $US28 million profit last financial year. The heavy write-downs in the miner's manganese, alumina and coal operations reflected the slump in commodities prices.<br /><br />According to an official release by South32, the diversified mining company's underlying earnings (excluding non-cash impairments) and the impact of foreign exchange movements dropped 76 per cent to US$138 million. <br /><br />The company said it was on track to achieve its objective to reduce unit cost of production (forecast) by 2016-17 end once it had completed restructuring its major operations. <br /><br />Chief executive Graham Kerr said, &ldquo;Twelve months on, South32 is a much stronger company with significantly lower costs and a balance sheet that provides flexibility.&rdquo;<br /><br />&ldquo;Looking to FY17, we have maintained production guidance for the majority of our upstream operations and will stretch performance to meet cost targets.&rdquo;<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/ABX.jpg" alt="News" width="382" height="382" /><br /><br />The financial year 2015-16 has been a ride full of downs for South32. It flagged down write-downs worth $US1.7 billion in February amid high market volatility, laid off more than 1000 workers globally, and reduced costs by $US386 million. The capital expenditure was also cut down by $US306 million. Yet, the company succeeded in exceeding full-year forecasts for its major portfolios including alumina, aluminium and coal in Australia.<br /><br />Revenue, however, shrunk 25 per cent to total at $US5.8 billion. South32 held the commodity market downturn responsible for the slid. The selling prices of its products also fell by an average 21 per cent. <br /><br />South32 spun off from the mining behemoth BHP Billiton in 2015. It is one of the world's leading producers of manganese alloy, used for manufacturing aluminium and steel products.</p>