South32 Ltd (When-Issued) American Depositary Receipts – Sponsored (Australia) (OTCMKTS:SOUHY)witnessed selling pressure in Wednesday’s trading session. The stock has been trending lower since the beginning of the year and has underperformed the broader indices. The stock has been forming lower tops and lower bottoms, which is a bearish sign. The stock currently trades below all daily moving average. The relative strength index continue to trade in the oversold zone but shows no signs of a reversal. The stock hit a fresh 52-week low during yesterday’s trading session. Traders believe the stock could head to levels of $4.25 in the near term.
South32 Ltd (OTCMKTS:SOUHY) announced financial results for the FY15. As per the reports, the biggest highlight of these results was a whopping 56% hike in EBIT earnings, which touched $1 billion at the end of the period. Company’s pro forma earnings increased by 41% and touched $575 million mark.
Pro forma PAT (profit after tax) for the period was $28 million. Continuing its efforts to reduce the controllable costs, South32 announced that it would take every step possible to cut down controllable cost by a minimum of $350 million by the end of FY2018. When it comes to sustainable capital expenditure, it wishes to register a negative growth of 9% to bring it down to $650 million in FY2016.
A strong balance sheet differentiates a market leader company from others, and South32 is no different in this category. Reports claim that its net debt has come down to $402 million in this financial year. The management team of South32 is optimistic towards bringing this amount further down in the next financial year.
The competition in the industry is increasing day by day, and South32 doesn’t want to leave any stone unturned to achieve a market leadership position. It has designed a strategy that can help it deliver sector leading shareholder returns and maximize returns on the invested capital.
The senior management team is delighted to announce these results and intends to continue this performance in the coming years as well. While announcing results, company’s Chief Executive Officer, Graham Kerr, said that South32 implemented many cost saving initiatives and region-wise operating model. Both of these initiatives have already started delivering results, which is something the executive committee is excited about.
Going forward, South32 intends to bring down all those costs that are in its control. The company has come up with a strategy to reduce controllable costs by at least $350 million in next two years. Once this objective is achieved, it will set the next target and work towards achieving that.