LONDON (ShareCast) - (Sharecast News) - South32 announced a big increase to its dividend and added to its share buyback after rising commodity prices fuelled a surge in first-half profit at the mining group.


Pretax profit for the six months to the end of December rose to $1.5bn (£1.1bn) from $170m a year earlier as underlying revenue increased 32% to $4.6bn. The company's operating margin rose to a record 44% from 24% a year earlier.

South32 increased its dividend to 8.7p a share from 1.4p and increased its buyback target by $110m to $2.1bn, leaving $302m to be returned to shareholders. Commodity producers' profits are booming as economies recover from the Covid-19 crisis, fuelling demand for metals, oil and other raw materials.

The company reported strong production at several of its sites including Brazil Alumina, South Africa Manganese and Worsley Alumina. The company increased annual production guidance for silver and lead by 5% at its Australian Cannington mine.

Graham Kerr, Group32's chief executive, said: "Looking ahead, we are well positioned to capitalise on current market conditions as countries continue their economic recovery from Covid-19, and into the future as they invest in new infrastructure that is expected to see continued growth in demand for the metals critical for a low carbon future."

South32 shares rose 3.6% to 242.50 at 10:55 GMT.

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