South32 Ltd (When-Issued) American Depositary Receipts – Sponsored (Australia) (OTCMKTS:SOUHY) retraced the recent loss some more as it finished the last trading session with a gain of 1.49%. The volume of the day at 181,000 was a bit higher than the daily average of 153,000 but it must be remembered that the daily average has been in its own declining mode. The volume pattern is very proper for a corrective state, especially when the stock is building a base. The bulls can wait for their opportunity and take any breakout of the upper boundary as the entry signal.
South32 Ltd (OTCMKTS:SOUHY) made public its financial results for the FY 2015. As per the reports, underlying EBIT increased by 56% to touch a whopping $1 billion milestone.
The senior management team of the company’s delighted to announce the results and hoped that the numbers would continue to increase with the passage of time. According to Graham Kerr, CEO of South32, various cost saving initiatives and regional operating model of the company have led it to this profitable situation. South32 seeks to slash down its controllable cost by at least $350 million over next three years.
Kerr also talked about company’s production and said that everything’s in line to touch the next level.
Financial Numbers
South32 has performed well over the past twelve months, thereby generating second to none revenues and sales figures. According to reports, pro forma underlying earnings before interest and tax for the year rose by 56% and touched an unbelievable $1 billion level. Overall underlying earnings of the company increased 41% to $575 million.
South32 reported PAT (profit after tax) of $28 million, better than last year’s performance. The senior management thinks that South32 can take its profitability to the next level by reducing cost. It seeks to cut down controllable cost by $350 million annually latest by the end of FY2018. Apart from this, South32 also plans to reduce sustainable capital expenditure by 9% to $650 million in FY2016.
The one thing that has made a significant difference over the past 12 months is nothing but its strong balance sheet. As of now, the net debt of the company has come down to $402 million, which is likely to reduce further in months to come. It’s working on a simple strategy to deliver excellent shareholder return and maximize the return on invested capital.
As the market continues to improve, the management team of South32 is optimistic about company’s enhanced performance in FY2016.
