South 32 – Production Results

South32 remains under Algo Engine sell conditions, but we continue to monitor the buying activity following increased speculation that the company could be a takeover target.

S32 reported June quarter production numbers which were in line with market expectations. Manganese and Cannington surprising to the upside and Met Coal disappointing.

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June quarter manganese ore production was up on recent revised guidance.

2020 earnings will be down significantly on 2019, caused by lower commodity prices. EBIT will fall by 30 – 40% and EPS falls from $0.20 to $0.05. It’s not until 2022 that markets expect S32 earnings to recapture the levels of 2019.

A slow down in global economic growth would adversely impact prices across aluminium, alumina, manganese, nickel, silver and coal.

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