South32 Limited (ASX: S32) shares are under selling pressure today.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $2.91. In early afternoon trade on Thursday, shares are changing hands for $2.77 apiece, down 4.8%.
For some context, the ASX 200 is just about flat at this same time.
This follows the release of South32's full-year financial results (FY 2025).
Here's why investors are favouring their sell buttons today.
Image source: Getty Images
South32 shares slide on revenue decline
South32 shares are tumbling after the company reported an 8% year-on-year decline in FY 2025 underlying revenue to US$7.61 billion.
Management said the decline came as higher average commodity prices and sales volumes were more than offset by lower revenue from its now divested Illawarra Metallurgical Coal (IMC), which the company sold in August 2024 for US$938 million. South32's Australia Manganese division was also impacted by Tropical Cyclone Megan.
On the positive front, underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) were up 7% from FY 2024 to US$1.93 billion. And the miner's underlying EBITDA margin improved by 3.5% year on year to 26.3%.
And the ASX 200 miner reported that its cost base decreased by US$579 million to US$5.44 billion in FY 2025 following the completed sale of IMC and management's continued focus on cost.
Free cash flow improved from a US$80 million outflow in FY 2024 to a positive cash flow of US$272 million in FY 2025.
Management declared a fully franked final ordinary dividend of US 2.6 cents per South32 share. That's down 16% from last year's final payout.
What did management say?
Commenting on the results that have failed to boost the South32 share price today, CEO Graham Kerr said, "Strong operating performance during the year enabled us to capitalise on improved commodity prices."
Kerr added:
We increased our production of commodities critical to the global energy transition, delivering annual production growth of 20% in copper and 6% in aluminium.
Key operational milestones were achieved, with Worsley Alumina securing environmental approvals for new bauxite mining areas, and Australia Manganese completing its operational recovery plan following the impacts of Tropical Cyclone Megan.
Addressing the outlook for Mozal Aluminium, he noted:
At Mozal Aluminium, despite engaging with stakeholders for several years, we do not have confidence that the smelter will secure sufficient and affordable electricity supply beyond March 2026, when the current agreement expires. As a result, we are limiting investment in Mozal Aluminium, and currently expect that the smelter will be placed on care and maintenance in March 2026.
Looking ahead, Kerr said, "We are focused on maintaining our strong operating momentum and capitalising on our transformed portfolio to deliver growth and returns for shareholders."
With today's intraday fall factored in, South32 shares are down 10% over 12 months, excluding dividends.
