MELBOURNE (Reuters) – Australia’s South32 Ltd reported a 80% plunge in half-year profit on Thursday, as a trade war between China and the United States hit prices of its key products, but the miner’s shares rose after it announced a special dividend.
Prices of South32’s top three commodities – metallurgical coal, aluminum and manganese – slumped in 2019 as the bruising Sino-U.S. trade war crimped demand.
However, the miner declared an interim dividend of 1.1 cents per share, down from 5.1 cents per share a year ago, and a special dividend of 1.1 cents per share. “At first glance, the results appear broadly neutral versus our estimates for earnings,” RBC Capital said.
“The extension of the capital management program could see the stock supported.” The miner’s shares rose 1.4% to A$2.59 by 0333 GMT.
The impact of this year’s coronavirus epidemic boosted demand for some of South32’s products, Chief Executive Officer Graham Kerr said. “There is a fair chance China will look at some kind of broad-based fiscal stimulus which might provide some support for commodities in the back-end of the second half,” he added.