Mining scene newcomer and BHP spin-off South32 (ASX, LON, JSE:S32) said Thursday it would pay a maiden dividend despite posting a net loss of $1.6bn for its first full fiscal year due to weak commodity prices and asset write-downs.
Underlying earnings, excluding non-cash impairments and foreign exchange movements for the Perth-based miner, fell sharply - 76% to $138 million. Revenue for the year also dropped 25% to $5.8 billion.
South32 saved $386 million during its first year of operations as a standalone company, while it reduced investment expenditure by $306 million.Yet, the board decided to pay one cent per share as final dividend, as it had a cash balance of $312 million at the end of June.
Despite the weak results, chief executive Graham Kerr said job cuts and other measures to trim expenses had reinforced the company's balance sheet during the commodity downturn.
South32 said it saved $386 million during its first year of operations as a standalone company, while it reduced investment expenditure by $306 million.
As a consequence, the diversified miner - the world's top manganese producer - continues to look for new assets, including Anglo American's (LON:AAL) 40% stake in their manganese joint venture - Samancor.
While Kerr didn't say whether South32 has the option to buy Anglo's part of the venture, it noted his firm was in a good position where it is comfortable to wait. "We're not going to pay a control premium for something we already have control of," Kerr said according to The Australian.
South32, listed in Australia, London and South Africa, also has interests in alumina, silver, nickel and coking coal - commodities that were hard hit in the wake of China's economic pullback.