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.
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.
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.
Chief executive Graham Kerr said, “Twelve months on, South32 is a much stronger company with significantly lower costs and a balance sheet that provides flexibility.”
“Looking to FY17, we have maintained production guidance for the majority of our upstream operations and will stretch performance to meet cost targets.”
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.
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.
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.
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