Mozal Aluminium Care and Maintenance Transition Poses Operational Challenge for South32
South32 Limited reported a 29% rise in profit for the half year ended December 2025, driven by higher base and precious metals prices and solid operational performance. The company declared a fully-franked interim dividend and maintained its FY26 production guidance, while advancing key projects and managing portfolio transitions.
- 29% increase in profit after tax to US$464 million
- 16% growth in underlying earnings to US$435 million
- Fully-franked interim dividend of US 3.9 cents per share declared
- FY26 production guidance largely unchanged except Brazil Aluminium revision
- Mozal Aluminium to transition to care and maintenance in March 2026
Financial Performance Highlights
South32 Limited has delivered a robust financial performance for the half year ended 31 December 2025, with profit after tax attributable to members rising 29% to US$464 million despite a slight 3% dip in revenue from continuing operations to US$2.81 billion. Underlying earnings, a key measure of operational performance, increased by 16% to US$435 million, supported by higher prices for base and precious metals and strong cost management.
The company’s underlying EBITDA margin improved to 28.2%, reflecting operational efficiencies and favourable commodity price movements, particularly for copper, silver, and aluminium. These results underpin South32’s confidence in its portfolio and growth strategy amid ongoing market volatility.
Dividend and Capital Management
In line with its capital management framework, South32 declared a fully-franked interim dividend of US 3.9 cents per share, representing 40% of underlying earnings attributable to members. The dividend is payable on 2 April 2026, with a record date of 6 March 2026.
Reflecting its strong balance sheet and positive outlook, the company increased its capital management program by US$100 million to US$2.6 billion, with US$209 million remaining to be returned to shareholders by February 2027. This includes ongoing share buy-backs and special dividends, signalling South32’s commitment to shareholder returns alongside growth investments.
Operational and Project Updates
Production guidance for FY26 remains largely unchanged across South32’s operated assets, with the notable exception of Brazil Aluminium, where guidance was revised downward due to operational challenges and energy disruptions. The company continues to focus on safe, reliable production and disciplined cost control.
South32 is advancing its growth pipeline, with significant capital expenditure of US$338 million invested at the Hermosa project during the half, progressing construction of the Taylor zinc-lead-silver mine and exploration at the Peake copper deposit. Sierra Gorda in Chile is also progressing studies for a potential plant expansion and exploration targeting mine life extension.
However, Mozal Aluminium in Mozambique will transition to care and maintenance in March 2026 due to electricity supply constraints, marking a significant operational shift. South32 is managing this transition carefully, including inventory drawdowns and workforce support.
Safety, Sustainability and Outlook
Safety performance improved markedly, with lost time injury frequency down 36% and total recordable injury frequency down 24%, reflecting the company’s ongoing commitment to workplace health and safety.
South32 reaffirmed its climate change targets, aiming to halve net operational greenhouse gas emissions by FY35 and achieve net zero by 2050. Despite a 16% increase in emissions in H1 FY26 due to drought-related power supply issues at Mozal Aluminium, the company remains focused on decarbonisation and resilience.
Looking ahead, South32 maintains a positive outlook, balancing disciplined operational execution with strategic growth and capital returns. The company’s strong credit ratings and liquidity position provide a solid foundation to navigate market uncertainties and capitalise on opportunities in critical metals.
Bottom Line?
South32’s strong half-year results and strategic progress set the stage for continued growth, though the Mozal Aluminium transition and commodity price volatility warrant close investor attention.
Questions in the middle?
- How will the transition of Mozal Aluminium to care and maintenance impact South32’s earnings and cash flow in FY27?
- What are the key milestones and risks for the Hermosa Taylor project’s construction and commissioning timeline?
- How might evolving commodity prices and geopolitical factors influence South32’s production guidance and capital allocation in the second half of FY26?
