South32 Ltd (OTCMKTS:SOUHY) Reports Strong Financial Results For FY15, Earnings Elevate By 41%


South32 Ltd (When-Issued) American Depositary Receipts – Sponsored (Australia) (OTCMKTS:SOUHY) tried to break above the previous day’s high but failed and closed at the end of the last trading session with a loss of 1.31%. The volume of 127,000 was a bit lower than the daily average of 138,000 but both the numbers implied the lack of interest in the instrument at this point of time. On the other hand, the bulls can soon think of a time to accumulate as the bearish momentum has been waning for the last few weeks, as indicated by the change in the angle of the decline.


South32 Ltd (OTCMKTS:SOUHY) has announced strong financial results for FY2015. As per the reports, underlying earnings for the year increased 41% to touch a whopping $575 million. The biggest highlight of the results was company’s EBIT that increased 56% and touched $1 billion figure.

Insights On Financial Results

PAT or profit after tax for the FY15 was $28 million. South32 seeks to control its cost over the coming few years to ensure that it can achieve the desired success level without any hassle. In this regard, it has decided to reduce the controllable cost by a minimum of $350 million over the next two years. It also wants to reduce the sustainable capital expenditure to $650 million in the next year, down 9% from this year’s level.

South32’s net debt has come down to $402 million in FY15, which is something the management team is delighted about. Its strong balance sheet gives it an edge over others in the market. The increasing market competition in the market isn’t hidden from anyone. To make sure that it doesn’t hit back in the future, South32 is working on a strategy to deliver a sector leading shareholders’ returns maximize the return on invested capital.

Management’s Call

The senior management team of the company is delighted to report financial results for FY2015 and hopes that the numbers will continue to improve in the coming time. According to Graham Kerr, South32 has been focusing on broadening its cost saving initiatives and regional operating model. They have started delivering results as per expectations. The company will further focus on controlling the controllable cost over the next three years’ time to mold things in its favor.

South32’s forward strategy for the coming year focuses on its portfolio of world-class assets. The management believes that optimizing the portfolio of assets will help the company in the future.

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