The South32 Ltd (ASX: S32) share price is having a tough time on Monday morning.
At the time of writing, the mining giant's shares are down 10% to $3.09.
This follows the release of the company's fourth quarter and full year update.
South32 share price sinks on update
According to the release, during the three months ended 30 June, South32 reported a 10% quarter on quarter increase in copper production to 15.3kt.
This means that the miner achieved 98% of its FY 2024 copper equivalent production guidance, with production of 60.8kt for the year. Management also notes that it remains on track to deliver on its operating unit costs guidance for its copper operations.
Aluminium production was largely unchanged year on year, as the Hillside Aluminium operation achieved record production, Brazil Aluminium continued to ramp up, and Mozal Aluminium progressed its recovery plan.
South32's alumina production was also largely unchanged year on year. Management notes that improved plant availability at Brazil Alumina was able to partially offset a temporary bauxite conveyor outage at Worsley Alumina.
And Cannington payable zinc equivalent production increased by 10% in FY 2024 despite adverse weather impacts. This was driven by the operation realising higher average metal grades.
FY 2025 guidance downgraded
Putting pressure on the South32 share price today is news that the miner has downgraded its guidance for FY 2025.
It has downgraded its production guidance for alumina by 5%, Sierra Gorda payable copper equivalent by 7%, and Cannington payable zinc equivalent by 9%.
The company has also announced pre-tax impairment expenses for Worsley Alumina of ~US$554 million and Cerro Matoso of ~US$264 million. They will be recognised in its FY 2024 results.
Nevertheless, South32's CEO, Graham Kerr, was pleased with the fourth quarter. He said:
We delivered another quarter of improved operating performance, achieving sequentially higher volumes across the majority of our operations, and remaining on track to achieve FY24 operating unit cost guidance. Our performance enabled us to capitalise on stronger commodity prices, lift sales volumes and release working capital, boosting cash generation in the quarter.
The sale of Illawarra Metallurgical Coal is expected to be completed later this quarter, further strengthening our balance sheet, simplifying our business, reducing our capital intensity and unlocking capital to invest in our high-quality development projects in zinc and copper. Construction and permitting are tracking to plan at the Taylor zinc-lead-silver deposit at Hermosa, the first phase of a regional-scale opportunity to supply commodities critical for the global energy transition.
The South32 share price is now down 16% over the past 12 months.
