Morningstar - South32 Ltd. (S32) Elevated South32 Earnings Benefit From Much Higher Prices but Unlikely to Be Sustained

Report

Morningstar

Mathew Hodge

EUR 101.80 For Business Accounts Only

Elevated South32 Earnings Benefit From Much Higher Prices but Unlikely to Be Sustained

We retain our AUD 1.85 per share fair value estimate for no-moat-rated South32. Adjusted fiscal 2017 net profit of USD 1.15 billion was a vast improvement on last yearâ€™s USD 138 million and was slightly ahead of our USD 1.08 billion forecast. The uplift was entirely due to commodity prices. Key outperformance versus our expectations was from Cannington and Illawarra Metallurgical Coal. Both operations suffered production issues through fiscal 2017 but managed to beat our reduced expectations. Ma...

25/08/2017 15 EN

Underlying

South32 Ltd.

South32 is engaged in mining and metal production from a portfolio of assets for the commodities of alumina, aluminium, bauxite, energy and metallurgical coal, manganese ore, manganese alloy, nickel, silver, lead and zinc. As of June 30 2016, Co. operated 10 segments, which were comprised of: Worsley Alumina, South Africa Aluminium, Brazil Alumina, Mozal Aluminium, South Africa Energy Coal, Illawarra Metallurgical Coal, Australia Manganese, South Africa Manganese, Cerro Matoso, and Cannington.

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AU000000S320 Australian Securities Exchange Australia

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Mathew Hodge

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Elevated South32 Earnings Benefit From Much Higher Prices but Unlikely to Be Sustained

South32 Ltd: 1 director

Manganese Supply Deficit Looms as Demand from Alloys and EV Batteries Increases

SOUTH32 with less fundamental stars is reduced to Neutral

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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