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.
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