* Results broadly in line with analyst expectations
* Miner to delay share buyback decision to Sept 2021
* Analysts see scope for recovery as commodity prices
* Shares fall by 1.6%
MELBOURNE - Aug 20 (Reuters) - Australian miner South32 Ltd
on Thursday reported an 80.5% slump in full-year
underlying profit on low prices for its key commodities and
delayed a share buyback decision given uncertainty in global
growth due to the COVID-19 pandemic.
Prices of South32's top three commodities metallurgical
coal, aluminium and manganese slumped in 2019 amid a trade
dispute between China and the United States and remained weak as
the pandemic disrupted businesses and hit production this year.
That crunched underlying net profit to $193 million for the
year ended June 30, in line with analyst expectations, compared
with $992 million a year earlier.
"It's hard not to note that volatile markets and weak prices
had an impact on our underlying profitability," Chief Executive
Graham Kerr told a media briefing.
As a result, the world's biggest manganese miner has pushed
back its decision around a share buyback by 12 months to
September 2021, after it announced the suspension in March, and
posted a final dividend of 1 cent per share, down from 2.8 cents
Shares fell by 1.6% to A$2.11 by 0221 GMT against a 0.9%
drop in the broader Australian market.
"We are very conscious of making sure that we have a strong
balance sheet... As soon as we start building excess cash on the
balance sheet again, we will return that to shareholders," Kerr
Cost cutting and a nascent recovery in some commodity prices
suggest the miner is well positioned to recover from here,
"Given signs of life are emerging in several of the key
business units, S32's post-COVID trajectory looks interesting,"
said Peter O'Connor of broker Shaw and Partners in a note.
The company said it expects to increase production at most
of its operations next year and forecast broadly lower operating
costs, as it reins in expenses.
The company, spun off from global mining giant BHP Group
in 2015, posted annual revenue of $6.08 billion, down
from $7.27 billion a year earlier.
(Reporting by Melanie Burton in Melbourne, Shashwat Awasthi and
Shruti Sonal in Bengaluru; Editing by Devika Syamnath, Shounak
Dasgupta and Shailesh Kuber)