The South32 Ltd (ASX: S32) share price is in focus today after the miner delivered a standout FY26 result, with underlying earnings up 55% to US$1.03 billion and total dividends rising 55% to 9.3 US cents per share.
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What did South32 report?
- Revenue from continuing operations rose 1% to US$5,816 million
- Profit after tax attributable to members increased 410% to US$1,087 million
- Underlying EBITDA grew 28% to US$2,462 million, at a 31% margin
- Total ordinary dividends for the year lifted 55% to 9.3 US cents per share (fully franked)
- Net tangible assets per share rose to US$2.12 (from US$1.93)
- Net cash position improved to US$283 million
What else do investors need to know?
South32 extended its capital management program to September 2027, with US$209 million still to be returned to shareholders. The board declared a final US 5.4 cents per share dividend, reflecting strong cash flow and capital discipline.
A major portfolio move was announced post-year-end, with South32 agreeing to sell its aluminium value chain assets to Alcoa for up to US$5.6 billion. This positions South32 as a focused base metals miner, targeting growth in copper, zinc, and silver.
Construction continued at the Hermosa Taylor zinc-lead-silver project in the US and the company approved a 30% expansion at its Sierra Gorda copper joint venture in Chile. Additionally, safety improved, with lost time injury frequency falling by 29% year-on-year.
What did South32 management say?
Commenting on the results, South32's CEO, Matt Daley, said:
Strong operating performance coupled with commodity price tailwinds underpinned one of the best financial results in our history, with Group underlying EBITDA increasing by 28 per cent to US$2.5 billion and underlying earnings increasing by 55 per cent to US$1 billion. … The sale of our aluminium value chain assets to Alcoa will simplify and strengthen our portfolio, positioning South32 as a leading base metals focused company with high-margin assets and a pipeline of compelling growth options in copper, zinc and silver. … Looking ahead, the outlook for our business is positive as we focus on safe and stable operations and growing our production of base metals into structurally attractive markets.
What's next for South32 Ltd?
Looking forward, South32 expects to complete the Alcoa transaction in the second half of FY27. Production guidance for key base metals operations is for modest growth, with Sierra Gorda copper output to rise by 5% in FY27 and another 2% in FY28. Cannington's zinc equivalent production is forecast to remain steady, and the Hermosa Taylor project is on track for first production in the second half of FY28.
The company aims to further streamline support costs and pursue growth investments in its base metals portfolio. Capital expenditure will be focused on expanding Hermosa and Sierra Gorda, and the group plans to review climate targets following the aluminium assets sale.
South32 share price snapshot
The South32 share price has smashed the S&P/ASX 200 index (ASX: XJO) over the last 12 months with a gain of over 75%.
