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South32 H1'18 profit drops 12% YOY; higher dividends declared

South32 Ltd. said Feb. 15 that it booked a 12% lower net profit of US$543 million, or 10.5 cents per basic share, in the first half of its fiscal 2018, from a post-tax profit of US$620 million, or 11.7 cents per basic share, in the first half of fiscal 2017.

Revenue in the first six months ended Dec. 31, 2017, however, grew 8% to US$3.49 billion, with underlying EBITDA increasing 2% to US$1.09 billion and underlying earnings rising 14% to US$544 million.

Total capital expenditure for the period increased 54% year over year to US$231 million.

Despite the drop in net profit, the BHP Billiton Group spinoff declared a 3.0 cents special dividend on top of an interim dividend of 4.3 cents per share, which is 19% higher than its inaugural interim dividend of 3.6 cents per share in the same year-ago period.

The company attributed higher realized prices for most of its commodities during the period for the US$273 million increase in sales revenue, despite lower coal and metal output at the Illawarra metallurgical coal and Cannington silver projects, respectively.

Metallurgical coal production dropped to 788,000 tonnes, from 1.4 million tonnes a year ago, as production at the Illawarra project was hurt by an extended outage and the Dendrobium longwall progressed through a faulted zone.

The diversified miner lifted its output guidance for its South African manganese operations by 8% to 2.0 million tonnes, while maintaining production targets for all other operations in fiscal 2018.