South32 Records Half-year Loss of $1.7 Billion

South32 Ltd. (ASX:S32,LSE:S32) released its financial results for the half year ended December 31, 2015, as well as its outlook for 2016. According to the company, it incurred a statutory loss of US$1.7 billion for the period; that loss is connected to the company’s writedowns for its manganese and coal businesses.
Other highlights include:

• 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.

The company’s outlook for 2016 is as follows:

• 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.

Click here to read the full South32 Ltd. (ASX:S32,LSE:S32) press release.