South32: Big Hermosa write-down

About the author:

Author name:

By Adrian Prendergast

Job title:

Senior Analyst

Date posted:

24 July 2023, 8:00 AM

Sectors Covered:

Mining, Energy

• South32's (ASX:S32) 4Q’FY23 marked a significantly better operational result compared to the previous period, mostly in-line with expectations.
• Illawarra, Sierra Gorda and Cerro Matoso were in-line. While manganese was the standout. Ali segment production was mixed.
• S32 outlined a ~US$1.3bn impairment against Taylor Deposit in Hermosa.
• High earnings and cash flow leverage, but we see S32’s final dividend at risk.
• We maintain an Add recommendation, viewing S32 as representing attractive long-term value at current levels.

Find out more

If you would like more information, please contact your adviser or nearest Morgans office.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.