Shares in diversified miner South32 Ltd (ASX: S32) are 5.98% higher at $3.46 after lifting its full-year net profit 8% to $US1.33 billion ($A1.81 billion).
South32’s underlying earnings for the year to June 30 were up 16% to $US1.33 billion, while revenue was up 9% to $US7.55 billion.
The company will pay a fully-franked final dividend of 6.2 US cents per share, down from 6.4 US cents a year ago.
The world’s largest manganese miner said healthy demand for manganese helped offset tepid coal output that resulted from technical hurdles at its Illawarra project, which is now expected to return to historical production levels in fiscal 2020.
Manganese prices have surged nearly 60% year-to-date, on the back of higher demand for the metal in battery technology as automakers increasingly look to electric vehicles.
South32’s annual manganese output rose 10% while full-year coking coal output fell but beat estimates as production ramped up at its Illawarra project, where work was stalled at its Appin coal mine last year due to elevated gas levels.
The miner said Illawarra continues to recover, with 6.1 million tonnes of production expected in fiscal 2019 and an anticipated return to historical rates of over 8 million tonnes per annum from second-half of fiscal 2020.
The company, which has nearly doubled in value since it was hived off from BHP Billiton Limited (ASX: BHP) in 2015, last November announced plans to cut interest in its South African coal business and this month completed the purchase of Canada’s Arizona Mining.
“We will also commence a process to broaden South Africa Energy Coal’s ownership in the September 2018 quarter,” said Chief Executive Graham Kerr.
The company expects group production to climb by 5% in fiscal year 2019.
Since the beginning of 2018, the South32 Ltd share price has dropped 1.29% compared to the S&P/ASX 200 Index, which has gained 2.94% in the period.