South32's share price soars as ASX 200 miner approves US$2.2 billion project.

February 15, 2024 06:25 PM AEDT | By Team Kalkine Media

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South32's share price soars as ASX 200 miner approves US$2.2 billion project. — Image source: shutterstock

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The South32 Limited (ASX: S32) share price is showing resilience today, trading in the green despite the company reporting a decline in profits for the first half of the fiscal year ending 31 December (H1 FY 2024). ASX mining stocks, including South32 Limited, are closely watched amidst earnings reports and market fluctuations, reflecting investor sentiment towards the mining sector.Here are the key highlights from South32's recent performance and announcements:

Financial Highlights:

Underlying revenue amounted to $3.88 billion, reflecting a 14% decrease from H1 FY 2023.
Profit after tax plummeted by 92% to $53 million compared to the prior corresponding period.
Underlying earnings saw a significant decline of 93% year-on-year, reaching $40 million.
The company declared an interim fully franked dividend of 0.4 US cents per share, down from the previous interim dividend of 7.3 Aussie cents per share.

Operational Performance:

Despite achieving record aluminium production, South32 reported a 48% decrease in underlying EBITDA to US$708 million. This decline was attributed to lower commodity prices and reduced volumes of metallurgical coal, partly due to planned longwall moves at the Illawarra Metallurgical Coal asset.
The company returned US$180 million to shareholders during the six-month period, including dividends and a share buyback.

Project Announcement:

In a significant development, South32 announced the approval of a final investment decision (FID) to develop the Taylor zinc-lead-silver deposit at its Hermosa project in Arizona, USA. The investment is valued at US$2.16 billion, with first production expected in the second half of FY 2027.
CEO Graham Kerr highlighted the strategic importance of this investment, emphasizing its alignment with the company's portfolio transformation towards commodities critical for a low-carbon future.

Future Outlook:

Despite the profit decline, South32 maintains its production guidance for FY 2024, expecting a 7% increase in production volumes in the current half-year.
The company remains focused on driving operational performance and cost efficiencies across its business.

Share Price Performance:

The South32 share price has faced challenges over the past 12 months, experiencing a decline of 32%. However, today's resilience in the share price suggests investor optimism surrounding the company's strategic investments and future growth prospects.

As South32 continues to navigate market challenges and pursue strategic initiatives, investors will closely monitor its operational performance and execution of key projects, which could influence the trajectory of its share price in the coming months.

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