South32, the BHP spinoff, today announced write downs of $594 million and plans to cut operating costs and capital expenditure further as it deals with volatile commodity prices.
The company today posted a a 56% fall in full year statutory after tax profit to $US28 million compared with $US64 million in 2014.
Revenue was down 7% to $US7.743 billion.
Lower coal prices reduced underlying EBIT by $US273 million. Significantly weaker manganese alloy and ore prices reduced earnings by another $US166 million.
However, stronger average prices for alumina increased them by $US278 million.
Over the next three years, the company aims to reduce costs by at least $US350 million annually. Capital expenditure will be cut by $US650 million in 2016.
And the company plans to distribute a minimum 40% of underlying earnings as six monthly dividends but no payout for the year to June 30.
Impairments for 2015 include a $US551 million adjustment to the value of the Wolvekrans Middelburg Complex at South Africa Energy Coal and the write-off of the Metallic Nickel Recovery project at Cerro Matoso of $US41 million.
South32’s asset portfolio is spread across five countries and includes alumina, aluminium, coal, nickel, manganese, silver, lead and zinc.
The results in detail: