South32 Ltd (S32.AX): Solid JunQ operations; strong cash generation expected

Research evidence excerpt

South32 Ltd (S32.AX): Solid JunQ operations; strong cash generation expected

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19 Jul 2026 20:49:50 ET │ 12 pages

South32 Ltd (S32.AX)

Solid JunQ operations; strong cash generation expected

CITI'S TAKE

Buy South32 reported a solid JunQ, with production broadly ahead of Citi

expectations in alumina, aluminium, silver and manganese, partly offset Price (17 Jul 26 16:00) A$3.90

by weaker Sierra Gorda copper and softer Cannington lead/zinc. Alumina Target price A$6.10

was 2% above Citi and in-line with VA consensus, aluminium was 3% Expected share price return 56.4%

above Citi and 1% above consensus, while manganese ore was 5% above Expected dividend yield 3.3%

Citi and 6% above consensus. The key miss was Sierra Gorda copper at Expected total return 59.7%

16.0kt, 13% below Citi and 8% below consensus, reflecting lower grades in

Market Cap A$17,497M the quarter. Silver was the standout at Cannington, 34% above Citi and

US$12,271M 23% above consensus. We expect cash generation to remain strong,

supported by a ~US$200m working capital unwind in 2H FY26 and FY26

capex tracking below Citi estimates.

Thiago OjeaAC

FY2026 - In aggregate, S32 finished FY26 well, exceeding guidance across Sierra +61-2-8225-2404

Gorda, Cannington, Brazil Alumina, Brazil Aluminium and South Africa Manganese, thiago.ojea@citi.com

while aluminium exceeded guidance by 1% and alumina was in line. Sales volumes Ephrem Ravi

increased 15% QoQ, helped by restored rail access at Cannington, easing port +44-20-7986-2462

congestion and sale of final Mozal inventories. ephrem.ravi@citi.com

Jack Whelan

Corporate Update - The announced sale of S32’s aluminium value chain assets, jack.whelan@citi.com

excluding Mozal, to Alcoa is expected in H2 FY27, subject to conditions including Krishan M Agarwal