South32 Share Discussion Threads

[clinton baptiste] 07/7/2016 11:42

I sold out yesterday. Market attention has been on Brexit, but at some stage focus will shift to the downwards trajectory of the yuan and the likely effect on commodity prices, imo

[harvester] 07/7/2016 07:58

Holding out for 100 to top-slice.

[anley] 05/7/2016 11:56

Sold out yesterday and have bought myself a case of champagne.......anyone can look at my posts going back to late last year.

GLEN is my other 20016 buy and still have these but I don't really post on that BB as there are too many foolish punters and they use CFD - a weapon of mass distruction...........

[anley] 28/4/2016 16:43

Sold another part of my holding as I just can't get my head round this announcement.

[clinton baptiste] 21/4/2016 12:56

Agreed.

From FT Alphaville today:

As for South 32 ………;
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hxxp://www.investe…1604210700088588V/
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Shares up 5%
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94p
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It’s a clean quarterly update i think
BE
Yeah, have to say, it looks decent.
PM
Graham Kerr insisting he’s focused on value not volume
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Admirably simple and moves it into net cash.
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Production bang in line.
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There’s a question about whether it’s missed the window to buy assets at properly distressed prices, but I’m not sure I believe that even after I typed it.
BE
Still a lot of stuff for sale, officially speaking, and S32′s name gets linked to basically all of it.
BE
Here’s Barclays.
BE
South32 delivered a decent production quarter in 3Q with all key assets tracking in line or ahead of our FY estimates. The company reiterated production guidance for all operations, as well as controllable cost reductions and capex. The only material operational change was the ramp up of manganese ore production in South Africa in response to very strong market conditions (YTD production 81% of our estimate). Importantly, the company reported a US$134m decline in net debt since Dec-15, reaching a net cash position of US$18m as of end March. This was despite a $30m FX related increase in finance leases and $23m of one-off redundancy costs. The implied underlying FCF generation is therefore $748m annualized, or ~11% FCF yield. We remain Equal Weight on the stock.
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Alumina (19% of 2016 EBITDA): Output in 3Q16 of 1.33mt increased 2% QoQ and YTD production is tracking at 76% of our FY estimate. This was driven by a bounce back in output at Worsley (+5% QoQ) following calciner maintenance in the prior quarter. Additional maintenance is scheduled in the Dec-16 quarter. Guidance was unchanged at 3.95mt for FY16. Brazilian alumina production was down 4% QoQ and guidance of 1.32mt remains unchanged.
· Aluminium (15% of 2016 EBITDA): Production in 3Q16 at 240kt was flat QoQ and YTD production is tracking at 76% of our FY estimate. South African production declined 1% QoQ as pot relining activity was deferred for the remainder of FY16. Despite that FY production is expected to be flat YoY due to lower power outages. Mozal aluminium operations were stable.
· Illawarra met coal (7% of 2016 EBITDA): Total coal sales at Illawarra rose 44% QoQ reflecting the start up of the Appin Area 9 longwall. YTD sales volumes are tracking at 69% of our FY estimate. The Appin Area 9 project was completed in the quarter and commissioned following a slight delay from initially guided 2HFY16. The project will help Illawarra sustain production at current levels, and capex came in 33% below the original budget of US$845 million. Production guidance was unchanged at 8.25mt for FY16.
· SA energy coal (25% of 2016 EBITDA): Production in 3Q16 of 7.7mt declined marginally, by 5% QoQ and -17% YoY. YTD production is tracking at 75% of our FY estimate and guidance was unchanged at 31.95mt for FY16.
· Manganese (10% of 2016 EBITDA): Ore production in Australia was up 2% QoQ (9% YoY), with seasonal impacts in Australia immaterial. Ore sales volumes were a record in a quarter with wild swings in price. YTD ore production is tracking at 76% of our FY estimate and guidance is unchanged. Alloys production in Australia took a hit down 37% QoQ as electrictity shortages in Tasmania forced the closure of 2 out of 4 furnaces and reduced load on the remaining capacity. These are expected to return to action by June. Operations in South Africa improved with ore production bouncing 161% QoQ as mining activity was restarted in response to better prices, with capacity targeted at 2.9mtpa (100% basis). YTD ore production is tracking at 81% of our FY estimate. Manganese alloy production remained low, down 12% QoQ (-68% YoY) following the previous decision to shut down 3 of the 4 furnaces in South Africa due to low profitability.
· Base metals (23% of 2016 EBITDA): Nickel production at Cerro Matoso rose 10% QoQ as grades and throughput rose following maintenance in Q2. YTD production is tracking at 76% of our FY estimate. Meanwhile silver production at Cannington declined 20% QoQ as throughput declined 18% due to a mill outage, with further maintenance to come in May and August. Silver production YTD is tracking at 75% of our FY estimate. Production guidance for nickel, silver and zinc was unchanged at 36.5kt, 21.65moz and 80kt respectively.
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BHP’s spinoff of South32 does look odd, in retrospect, given its balance sheet was built for armageddon.
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Which BHP isn’t.

[togglebrush] 21/4/2016 10:12

RNS Out
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QUARTERLY OPERATIONAL REPORT MARCH 2016
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IMHO this looks quite good

[arja] 11/3/2016 05:26

good performance in OZ and will see a nice up move in UK today I think .

[togglebrush] 08/3/2016 16:53

Press
'

[anley] 07/3/2016 16:12

or 78p..........

I think most people who read my posts some months ago never traded this share.........part of the price is in the way the company controlled production and used the cash flow to repay debt.

We will see........

[dunns_river_falls] 07/3/2016 16:10

Flying today

[arja] 03/3/2016 10:46

painfully slow but moving gradually in OZ and UK will follow the leader . maybe 72 tomorrow hopefully

[arja] 02/3/2016 08:22

just follows price in OZ which is lead market and where most of the volume is . Closed at 68.7p equivalent there but a bit shy of this here . Maybe punters here fear a down move in OZ tomorrow if DOW retreats

[anley] 26/2/2016 09:54

Well I did tell this BB what a good company S32 was last year and I am now finally out having taken a really good profit I still think that over the next year or so the price will be back up to the £1 level and all the big City scribblers will have missed it.............

[togglebrush] 25/2/2016 05:58

‘
Extract
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“The continuing optimisation of our high quality operations and balance sheet has enabled us to reduce net debt by almost US$300M, despite continued weakness in commodity markets. Our low financial gearing and operational leverage is a powerful combination and the decisive action we are taking across our portfolio will strengthen short term cash flow.” Graham Kerr, South32 CEO
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PERFORMANCE SUMMARY
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- Statutory loss of US$1.7B includes non-cash impairment related charges of US$1.7B.
- Underlying EBITDA of US$542M for an operating margin of 20%.
- Underlying EBIT and Underlying earnings of US$141M and US$26M, respectively.
- Controllable costs(1) reduced by US$182M.
- Total capital expenditure(2), including equity accounted investments, reduced by 22% or US$85M to US$301M.
- Closing net debt reduced by US$286M to US$116M.
- Underlying return on invested capital (ROIC) of 1.4%.
- No dividend declared for H1 FY16.
‘
OUTLOOK
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- FY16 production guidance maintained for the majority of our upstream operations.
- Major restructuring initiatives underpin targeted US$300M reduction in controllable costs in FY16. - Redundancy and restructuring charges(3) of US$37M anticipated in the June 2016 half year.
- FY16 Capital expenditure(2) guidance, including equity accounted investments, lowered by US$150M to US$550M.
- Well positioned to significantly exceed our US$350M controllable costs savings target.

[anley] 19/2/2016 09:20

S32 to buy Anglo American's 40% stake in their manganese joint venture.......

an interesting deal which would make S32 the worlds biggest manganese producer and draw the competition authorities to open a file should this become serious.

As for price etc ...........would not like to hazard a guess so we have to wait until next week for the S32 results.

[gateside] 05/2/2016 16:10

careful... maybe you are right and that once there is more info out there on S32 it will do better. I did say that long term I feel that this will do well.

I personally feel that Miners have not fully turned the corner yet and there is still more potential downside to come.

But the lack of larger debt will serve S32 well in long term

[darias] 05/2/2016 16:00

Careful

As you say, "we know very little about this company and it has been crushed along with every other commodity company". Hopefully no news is good newa.

We shall soon know.

[careful] 05/2/2016 15:57

i disagree gateside.
we know very little about this company and it has been crushed along with every other commodity company.
despite a much stronger balance sheet than others.
if you remember it was in a position to make acquisitions.

just guessing, but i think results will reassure on long term future.

yesterday it pre announced it planned $1.7bn writdown of assets.
that is out of $11.03bn.
market cap is a mere $4.19bn.

[gateside] 05/2/2016 15:31

I can see results on 25 Feb not being good and sending this sub 50p again. But long term there is good value here.

[anley] 05/2/2016 09:53

I have cashed in for a good profit but kept a nominal number so I can watch events.

[anley] 04/2/2016 09:29

Wait until 25 FEB for the full picture.

SA is not a stable country and what S32 are doing seems sensible but we shall have to wait..........

[catsick] 04/2/2016 08:14

Up 11 pct , nuts

[arja] 25/1/2016 09:12

so UK punters expecting a fall in OZ tonight as finuished at 48.75 there ! Probably they are correct sadly .

[arja] 25/1/2016 08:05

wonder why it has not oppened yet yet !

[careful] 22/1/2016 10:18

gearing, net debt so low.
a market cap of £2489m, ($3500m) against net assets of $11bn make this one of the best commodity recovery punts.
unknown, unreported.