South32: profit up 5x, but operating cash flow trails EBITDA

26 августа South32 раскрыла результаты за финансовый год, закончившийся 30 июня 2026 года. Чистая прибыль выросла на 410,3% до 1087,0 млн долл., выручка прибавила 0,6% до 5800,0 млн долл., а EBITDA снизилась на 1,2% до 1321,0 млн долл. При текущей цене акция выглядит скорее привлекательно: мультипликатор EV/EBITDA 11,8 выше собственного трёхлетнего среднего 8,2, но дивидендная доходность 1,8% и отрицательный чистый долг дают поддержку.

Key takeaways

— Net profit up 5x thanks to one-offs, not operational dynamics

— EBITDA down 1.2%, margin narrowed to 22.7%

— Operating cash flow for 12 months at 1600.0 million USD, above EBITDA

— Net debt negative: minus 1026.0 million USD, ratio to EBITDA for 12 months at minus 0.78

— Dividend yield 1.8% with negative net debt leaves room for payouts

— Valuation: EV/EBITDA 11.8 vs 3-year average 8.2

Attractiveness

Key figures, USD bn

Net profit up 5x thanks to one-offs, not operational dynamics

For the reported period, net profit came in at 1087.0 million USD versus 213.0 million USD a year earlier – up 410.3%. Revenue was nearly flat (+0.6%), and EBITDA even declined by 1.2%, so such a sharp jump in profit is not explained by core operations.

Likely, a significant part of the increase is due to one-off items – for example, asset sales or revaluation. Without them, profit growth would have been much more modest. Investors should look at operating metrics, which do not show the same improvement.

EBITDA down 1.2%, margin narrowed to 22.7%

EBITDA for the reported period was 1321.0 million USD, down 1.2% from a year earlier. EBITDA margin narrowed from 23.1% to 22.7% – pressure on profitability persists despite stable revenue.

The decline in margin may be due to higher costs or a shift in sales mix. The company did not disclose details, but the trend is clear: operating efficiency has deteriorated somewhat.

Operating cash flow for 12 months at 1600.0 million USD, above EBITDA

Over the trailing twelve months, operating cash flow reached 1600.0 million USD, exceeding EBITDA for the same period (1321.0 million USD). This indicates good earnings quality: the company generates sufficient cash from core operations.

The positive gap between operating cash flow and EBITDA is a rare and positive signal. It means working capital is working in the company's favor rather than tying up funds.

Net debt negative: minus 1026.0 million USD, ratio to EBITDA for 12 months at minus 0.78

On the latest balance sheet, net debt was minus 1026.0 million USD – cash exceeds debt. The ratio of net debt to EBITDA for the trailing twelve months is minus 0.78, indicating financial strength.

Over the past 12 months, net debt decreased by 0.3 billion USD, confirming the company's ability to generate free cash. This position allows maintaining dividends and funding investments without resorting to debt.

Dividend yield 1.8% with negative net debt leaves room for payouts

Over the trailing twelve months, the company paid dividends, providing a yield of 1.8% at the current price. With negative net debt (minus 1026.0 million USD), the company has no need to direct funds to debt repayment, creating room for future payouts.

Our estimated dividend for the current year depends on the payout policy and the size of net profit. If the company maintains its payout ratio at prior-year levels, the dividend could be comparable to the current one. However, much will depend on one-off items in profit – if they do not repeat, the base for the dividend may be lower.

Valuation: EV/EBITDA 11.8 vs 3-year average 8.2

The current EV/EBITDA multiple for the trailing twelve months is 11.8, notably above the three-year average of 8.2. The stock trades at a premium to its own history, partly justified by strong cash flow and negative debt.

P/E for the trailing twelve months is 15.3, ROE is 12.8%. Dividend yield of 1.8% is below the key rate, but for a commodity company with negative debt this is acceptable. If operating metrics do not improve, the current valuation may prove stretched.

Valuation on the latest reported figures

Bottom line

South32 finished the year with strong net profit growth, but it was driven by one-offs, while operational dynamics are weak: revenue is stagnant, EBITDA and margin are declining. At the same time, the company generates robust operating cash flow (1600.0 million USD over 12 months) and has negative net debt, supporting dividends. At the current price, the share looks rather attractive: the premium to its own history (EV/EBITDA 11.8 vs 8.2) is offset by financial strength and potential for margin recovery. The key question for holders is whether the company can improve operating metrics next year; otherwise, the current valuation may prove stretched.