- South32 posted a fall in full-year earnings as lower aluminium and thermal coal prices more than offset an increase in production volumes and cost-reduction initiatives.

Underlying EBITDA fell 13% to $2,197m in the 12 months to 30 June 2019 while revenue slipped 4% to $7,274m.

Earnings were further impacted by the recognition of the $540m impairment charges in relation to its South Africa Energy Coal operation.

South32 said it had entered into exclusive negotiations with Seriti Resources Holdings Proprietary for the purchase of South32's South Africa Energy Coal business.

Seriti's offer included a modest up-front cash payment with a deferred payment mechanism whereby both companies would share commodity price upside for an agreed period.

This divestment would significantly reduce the firm's sustaining capital intensity, further strengthen its balance sheet and improve margins.

However, group production volumes saw a 3% increase on the year.

"We achieved record production at Hillside Aluminium, a 57% increase in volumes at Illawarra Metallurgical Coal and strong manganese ore production of 5.5m tonnes,' said CEO Graham Kerr.

Looking ahead, the company said it expected group production volumes to rise by a further 3% in the new financial year.

Higher production volumes, weaker producer currencies and lower raw material input costs, along with the continuation of initiatives to mitigate inflation and maintain margins, were expected to result in lower operating unit costs for the majority of its operations in full-year 2020.

South32 said it would pay a final dividend of $2.8 cents per share for the full year ended 30 June 2019.

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