Full Year 2024 South32 Ltd Earnings Call (UK and South Africa) Transcript
Key Points
- South32 Ltd (ASX:S32) achieved a 14% improvement in total recordable injury frequency for FY24, indicating enhanced safety measures.
- The company recorded an underlying EBITDA of USD1.8 billion and underlying earnings of USD380 million, showcasing strong financial performance.
- South32 Ltd (ASX:S32) lowered its net debt by USD329 million in the second half of FY24, strengthening its financial position.
- The Board resolved to pay a USD140 million fully franked ordinary dividend and allocated USD200 million for an on-market share buyback, reflecting confidence in the company's financial health.
- Significant milestones were achieved, including the construction progress of Hermosa's Taylor zinc-lead-silver deposit and the sale of Illawarra Metallurgical Coal for up to USD1.65 billion, simplifying the portfolio and focusing on critical commodities for a low-carbon future.
- The lost time injury frequency increased by 19%, indicating ongoing safety challenges despite improvements in other safety metrics.
- Operations at GEMCO were suspended due to significant damage from Tropical Cyclone Megan, impacting production and requiring phased recovery efforts.
- The West Australian Environmental Protection Authority imposed conditions on the Worsley development proposal that South32 Ltd (ASX:S32) found unreasonable and impractical, leading to an appeal process.
- The company faces potential increases in unit costs at Worsley due to stringent environmental conditions, particularly around carbon emissions.
- The business interruption insurance claims related to GEMCO are expected to be a prolonged negotiation process, potentially delaying financial recoveries.
Thank you, and good afternoon, everyone, and thanks for joining us today. On the call with me today is our Chief Financial Officer, Sandy Sibenaler.
Financial year 2024 was a pivotal year for our business in which we accelerated our portfolio transformation towards commodities critical for a low-carbon future. Before I go into more detail on the milestones we achieved this year, I'd like to talk about safety.
We assess our safety performance through a range of both leading and lagging indicators. During the year, our significant hazard frequency and leading indicator increased by 34%, indicating a positive reporting culture and increased hazard awareness. Our total recordable injury frequency for FY24, a lagging indicator, also improved by 14%.
However, our lost time injury frequency increased by 19%, underscoring that while we had a fatality-free year at our operations, we are still seeing too many serious injuries. And we must be relentless in our pursuit of a safer workplace.
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