South32 (S32) H2 2024 earnings summary

Executive summary

• FY24 marked a pivotal year with accelerated portfolio transformation toward low-carbon commodities, highlighted by the sale of Illawarra Metallurgical Coal and final investment approval for Hermosa's Taylor deposit.

• Reported a net loss after tax of US$203M for FY24, driven by impairments at Worsley Alumina (US$388M post-tax) and Cerro Matoso (US$248M post-tax), partially offset by a reversal at Illawarra Metallurgical Coal (US$139M post-tax).

• Underlying EBITDA reached US$1.8 billion and underlying earnings US$380 million, with improved H2 performance due to stronger operations and commodity prices.

• US$198M returned to shareholders in FY24, with a US$200M share buy-back to commence post-IMC sale.

• Focused on growing copper and low-carbon aluminium volumes, maintaining a strong balance sheet, and disciplined cost management.

Financial highlights

• Underlying EBITDA for FY24 was US$1.8 billion; underlying earnings were US$380 million.

• Net debt reduced by US$320 million in H2 FY24, but stood at US$762M at 30 June 2024; pro-forma net cash expected to be ~US$250M after IMC sale.

• H2 FY24 ordinary dividend of 3.1 US cents/share (US$140M); total US$198M returned to shareholders in FY24.

• US$200M allocated to an on-market share buyback.

• Free cash flow from operations excluding capital expenditure was US$1,000M, with a significant uplift in H2 FY24.

Outlook and guidance

• Taylor Zinc-Lead Deposit construction progressing to plan, expected to deliver multi-decade returns and increased supply of critical commodities.

• Low-carbon aluminium production expected to grow 17% in FY25 and 8% in FY26; copper production to rise 15% in FY25 and 6% in FY26.

• Capital expenditure guidance for FY25 is US$1,375M, with ~85% directed to base metals.

• GEMCO phased return to mining underway; wharf operations expected to recommence in Q3 FY25, with normalized production in FY26.

• Worsley production guidance: 4.6Mt from FY27, contingent on EPA permit resolution; FY26 guidance at 3.75Mt.