S32CD South 32 Limited

By Rhiannon Hoyle and David Winning

South32 Ltd. increased its share-buyback program by US$50 million as it anticipates a stronger outlook for commodity markets in the second half of its fiscal year.

Perth, Australia-based South32 said the increase to the buyback means it has US$158 million still to return to shareholders by September based on its current capital-management plans.

It announced the shift in returns alongside a net profit of US$685 million for the six months through December, down 34% on a year earlier. Underlying earnings dropped 44% to US$560 million, although underlying revenue edged up by 0.4% to US$4.52 billion.

First-half earnings were weighed by softer commodity prices, higher inflation and uncontrollable costs, but beat market expectations for underlying earnings of US$493 million, according to 12 analyst forecasts compiled by Vuma Financial.

Chief Executive Graham Kerr said the increase to South32's capital-management program reflects the miner's strong financial position and confidence in the business outlook. Metals prices have recently rebounded toward last year's highs, lifted by China's economic reopening after years of strict pandemic controls and low global supplies.

"Commodity markets have strengthened, leaving us well placed to capitalize on planned production growth and lower operating unit costs expected across the majority of our operations in the second half of the 2023 financial year," said Mr. Kerr.

South32, which recorded a 12% increase in copper-equivalent production in its first fiscal half, expects a further 6% increase in group output in its second half.

Meanwhile, directors of the mining company declared an interim dividend of 4.9 U.S. cents a share.

South32 separately said Katie Tovich, who has been chief financial officer for nearly four years, will become chief human resources and commercial officer from April. Vice President Finance Sandy Sibenaler will be appointed chief financial officer, the company said.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com and David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

February 15, 2023 18:34 ET (23:34 GMT)

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