South32 returns to profit following BHP’s turnaround in FY2017

<p>BHP Billion spin-off South32 Limited announced Thursday, August 24, that it has ended its last financial year in profit. The company&rsquo;s revenue improved significantly, thanks to its high operating leverage and higher commodity prices. South32 has a product portfolio that encompasses bauxite, alumina and aluminium.</p> <p>Notably, BHP Billiton announced its annual results much in the same line as South32 last Tuesday, August 22. The natural resource giant returned to profit last financial year following heavy losses a year ago.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/South32logo.jpg" alt="News" width="517" height="258" /></p> <p>South32&rsquo;s revenue rose 20 per cent year-over-year from US$5.81 billion to US$6.95 billion as on June 30, 2017. Expenses were reduced from US$7.24 billion to US$5.74 billion as well, which led to a profit (from operations) of US$1.79 billion.</p> <p>On an underlying basis, South32's EBITDA more than doubled to US$2.41 billion from US$1.13 billion. Underlying earnings rose from a small profit of US$138.0 million reported last year to USD1.14 billion in FY2017.</p> <p><a title="AlCircle Report" href="http://www.alcircle.com/exclusivereport/?m=exclusivereport" target="_blank"><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/buynow.gif" alt="News" width="480" height="84" /></a></p> <p>On the impressive growth registered, South32 Chief Executive Graham Kerr said, "Our aluminium smelters and refineries operated at their maximum technical capability and Mozal achieved record production. We adjusted production in our manganese business to take advantage of higher prices, consistent with our focus on value over volume. A review of our operating systems and practices at Illawarra Metallurgical Coal is continuing and we are working towards a staged and controlled ramp-up of operations at our Appin colliery, commencing in September."</p> <p>Formed in 2015, South32 produces about 5.3 kilo tonnes of alumina a year. Bauxite is mined and refined into alumina at the company&rsquo;s Worsley Alumina and Brazil Alumina. Alumina is smelted into aluminium at its Mozal smelter and South Africa Aluminium&rsquo;s Hillside smelter.</p>