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S32, SOUTH32 LIMITED
nipper
post Posted: Aug 30 2019, 10:09 AM
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In Reply To: early birds's post @ Aug 30 2019, 10:01 AM

The $2.50 line has to hold? Sell the coal biz and it will be a cleaner set of numbers, so it could rerate

But external factors are weighing, global growth and trade war issues keep rearing their ugly heads




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Aug 30 2019, 10:01 AM
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In Reply To: nipper's post @ Aug 30 2019, 09:55 AM

at what price level i can have another big bite again??
it's been good tp me so far. tongue.gif



 
nipper
post Posted: Aug 30 2019, 09:55 AM
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  • South32 (S32) has reported a statutory profit after tax decrease of 71% on the prior year to US$389 million. While underlying EBIT declined 19% to US$1.44 billion, falling short of analyst consensus as surveyed by Bloomberg.
Drivers

  • A large US$504 million pre-tax (US$578 million post-tax) impairment to its South African energy coal operation weighed on its full year profit result. Output was impacted by an extended outage at the facility with production decreasing 8% over the year and operating costs lifted 11%. Export sales were also heavily impacted by the outage. The weaker performance in the South Africa business was flagged at its recent quarterly update in July. S32 also announced that it was currently in negotiations with Seriti Resources Holdings to offload the South Africa operations with hopes the transaction can be finalised by June 2020.
  • The fall in underlying earnings came despite solid operating results. The group managed to lift overall production volumes by 3% over the year and also reducing labour, energy and materials costs. These benefits were offset by lower aluminium and thermal coal prices. Its Hillside Aluminium operations in South Africa hit record production in FY19 but still ran at a loss as the realised sales price fell 8.6% to US$2,035/t and operating unit costs rose 12% to US$2,045/t.
  • Production at S32’s Illawarra Metallurgical coal jumped 57% as operating margins grew rapidly from 15% in FY18 to 48% in FY19 on a significant slide in costs and slight improvement sale price. Its manganese business has been relatively steady. Unsurprisingly, aluminium and energy coal operating margins fell sharply.
Dividend

  • South32 has also lowered its final dividend by 54% to US2.8 cents per share (cps), down from US6.2 cps in FY18. The dividend will be fully franked and paid on 10 October 2019 with an ex-dividend date of 12 September 2019. S32 has maintained its 40% ratio of underlying earnings.
Outlook

  • Group production is again expected to increase by 3% in FY20. But S32 have lowered South Africa Energy Coal FY20 saleable coal production guidance to between 26.0 and 28.0Mt.
  • Cost guidance is expected to be lower for its Cannington silver and lead mine and at its manganese operations in South Africa, but costs are expected to rise at its Illawarra metallurgical coal mine.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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nipper
post Posted: Jul 5 2019, 01:34 PM
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In Reply To: mullokintyre's post @ Jul 5 2019, 01:01 PM

S32 suffers from a couple of challenges
1. being thought of as the ones BHP didn't want to hold.
2. Not ticking the boxes for a new economy, being a 20th C extractive dinosaur

Pt 1 is true to a certain extent, but some of this is based on scale and longevity, the leviathan didn't allocate time or capital to what was considered 2nd tier and unloved, in their portfolio...

Pt 2 may actually work in valuation favour, as the 'taint' of coal and mineral resource extraction means that many investors will make a reflex NO (an Adani moment)

But ultimately, it's where the assets held sit in the quartiles of global production as well as the cyclical nature of demand/ supply realities. At present S32 is in a fairly good place, I'd think.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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mullokintyre
post Posted: Jul 5 2019, 01:01 PM
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S32 is one of "four beaten up stocks" that NAB share trade group see as recovery stocks.


QUOTE
Market capitalisation: $15.9 billion
12-month total return: –6.8%
FY20 projected yield: 4.4%, fully franked
Analysts’ consensus price target: $3.84 (Thomson Reuters), $3.75 (FN Arena)
South 32 was spun out of BHP in 2015 as a result of the parent company deciding to focus on its four commodity “pillars” of iron ore, oil, copper, and coal. The commodities outside this core portfolio (mainly aluminium, manganese, nickel, silver and lead) were spun off into South32, which generates about two-thirds of its earnings from aluminium (including alumina) and manganese. South 32 is also involved in coking (steelmaking) coal in Australia (Illawarra) and thermal (electricity) coal in South Africa, but the latter business is up for sale.

Being a diversified miner, it is rare that all commodities in the portfolio are going well, and the March quarterly production report disappointed: S32 cut FY19 production guidance by 4-5% for alumina and 6% for thermal coal. On the plus side, the manganese assets are performing strongly – and the company’s silver exposure is also punching above its weight.

Analysts expect S32 to show earnings per share (EPS) falls in FY19 and FY20 (the company reports in US$), but the fall from above $4.20 in October to current levels around $3.20 has opened up value that retail investors appear to be picking up on, with the added attraction of a prospective dividend yield in the range of 4.4%–4.6%, fully franked.


It is a producer, it sells stuff, and may even make a profit.
It has a yield three times what the bank is offering on deposits.
I am in, based mainly on its silver potential.
Mick



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nipper
post Posted: Feb 16 2019, 11:10 PM
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QUOTE
Shares in S32, (a $18.5 billion company) jumped more than 3 per cent to $3.80 in early trading on Thursday after its half-year results exceeded analyst expectations.

South32 said it would pay a special dividend after reporting a $US635 million ($895.6 million) first-half profit. Shareholders will receive an interim dividend of US5.1¢ (7.2¢) and a special dividend of US1.7¢ (2.4¢) a share, both fully franked, on April 4.

The move to return $US511 million to shareholders through the two dividends completes 87 per cent of South32's $US1 billion capital management program.The remaining $US127 million is scheduled to be returned to shareholders by April 10 through the company's share buying program


Capital management.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 

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early birds
post Posted: Oct 4 2018, 11:27 PM
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In Reply To: blacksheep's post @ Oct 4 2018, 08:27 PM

it finally lift over the reasoned trading range [3.00---4.00]

really happy for the long termer ,
now aimed for over 5.00 bucks. tongue.gif



 
blacksheep
post Posted: Oct 4 2018, 08:27 PM
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In Reply To: blacksheep's post @ Sep 26 2018, 08:03 PM

QUOTE
Alumina, South32, BHP among top picks for Macquarie


Macquarie picked three winners - today at least - all 3 performed well today. S32 up 7.32%, on the back of the news the worlds largest alumina refiner, Alunorte, had ceased production indefinitely. Alumina Limited was the best performer out of the three, rising 10.8%.

BHP rose mainly on the back of suggestion of a major boost in demand for copper
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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

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blacksheep
post Posted: Sep 26 2018, 08:03 PM
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Alumina, South32, BHP among top picks for Macquarie

QUOTE
"South32 was the main benefactor from the changes to our commodity price forecasts due to its exposure to alumina spot sales," Macquarie said in its report.

"The stock continues to offer more upside to our base case using spot prices compared to BHP and Rio Tinto. South32's earnings rise significantly due to the upgrades to alumina more than offsetting weaker base metals and silver prices. Our FY19, FY20 and FY21 earnings rise 17 per cent, 29 per cent and 26 per cent."

https://www.afr.com/markets/equity-markets/...20180926-h15vyx

Stockhead article on Macquarie's commodity price forecasts contains a couple of charts and can be viewed here->https://stockhead.com.au/resources/which-way-will-the-key-commodities-go-in-the-next-two-years-in-one-chart/
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: early birds  
 
blacksheep
post Posted: Sep 22 2018, 07:39 PM
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QUOTE
Colombia’s Constitutional Court has sided with Australia’s South32 (ASX, LON, JSE:S32), saving the company from paying $400 million in compensation for alleged damages to local communities caused by waste emissions from its Cerro Matoso nickel mine and smelter.

The final ruling, local paper La Razón reported, was based on independent medical examinations ordered by the court, which concluded there was not enough evidence to link community diseases to the product of the mine operation.

But the court upheld part of a previous ruling requiring the company to re-apply for its environmental licensing, after carrying a community consultation process.


read more - http://www.mining.com/colombian-court-hand...nt-pay-damages/





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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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