Shares in South32 Ltd (ASX: S32) have hit a fresh 12-month high after the company exceeded expectations for first-half production.
The diversified miner said in a statement to the ASX that its FY26 production guidance was unchanged for all of its operated assets, while guidance for the non-operated Brazilian aluminium business was under review, "as we await the operator's revised ramp-up profile, following lower than planned quarterly volumes''.
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Better-than-expected production
Diving into each commodity, alumina production was up 3% in the first half, aluminium production was up 2%, zinc was up 13%, and manganese was up 58%.
RBC Capital Markets analysts said that the result was "generally ahead of consensus''.
Importantly, FY26 production guidance was reaffirmed across all operated assets, with H1 operating unit costs tracking in line with or below guidance at most operations. Given concerns around seasonal fires and wet weather, the strong volume and cost performance will be seen as a positive.
RBC said the non-operated Sierra Gorda copper operation continued to perform well, delivering US$180 million in distributions to South32.
South32 Chief Executive Officer Graham Kerr said it was a solid result.
We continued to deliver consistent operating results, with FY26 production guidance maintained across our operated assets and first half operating unit costs tracking in line with guidance. Our consistent operating performance, combined with strengthening market conditions, enabled the group to maintain a strong financial position while investing in our high-returning growth options and delivering returns to shareholders. Completing the divestment of Cerro Matoso during the quarter further simplified our business, consistent with our strategy to focus our portfolio on high-quality operations and growth options in base metals.
Mr Kerr said the company also "progressed construction of Hermosa's large-scale, long-life, Taylor zinc-lead-silver project, and completed the exploration decline for the Clark battery-grade manganese deposit''.
He added:
Sierra Gorda delivered strong copper volumes and cash returns, and we are pursuing further copper growth through our pipeline of development options and exploration prospects. During the quarter, our Ambler Metals joint venture approved a circa-US$35m work program to advance the high-grade Arctic polymetallic deposit and test exploration targets within this underexplored, regional land package in Alaska.
South32 shares were 4.3% higher at $4.36 at noon on Thursday. The company was valued at $18.75 billion at Wednesday's close.
RBC has an outperform rating on South32 shares and a price target of $4.20.
