Bulletin: South32 Ltd.'s Strong Results Provide A Large Rating Buffer; Ratings Unaffected

MELBOURNE (S&P Global Ratings) Aug. 25, 2016--S&P Global Ratings said today that South32 Ltd.'s (BBB+/Stable/A-2) results for the fiscal year ended June 30, 2016, are in line with our rating expectations. The strong results have built a large rating buffer for the company to undertake potential growth opportunities. Despite challenging trading conditions affecting the company's main commodities, South32 generated US$597 million of free cash flow and net cash of US$312 million on the balance sheet. The company's transition to a leaner operating model, cash-saving initiatives, and reduction in capital expenditure have offset the negative impact from lower commodity prices. In our view, South32's strong balance sheet differentiates the company from other investment-grade mining peers. It provides the company with a

...MELBOURNE (S&P Global Ratings) Aug. 25, 2016--S&P Global Ratings said today that South32 Ltd.'s (###+/Stable/A-2) results for the fiscal year ended June 30, 2016, are in line with our rating expectations. The strong results have built a large rating buffer for the company to undertake potential growth opportunities. Despite challenging trading conditions affecting the company's main commodities, South32 generated US$597 million of free cash flow and net cash of US$312 million on the balance sheet. The company's transition to a leaner operating model, cash-saving initiatives, and reduction in capital expenditure have offset the negative impact from lower commodity prices. In our view, South32's strong balance sheet differentiates the company from other investment-grade mining peers. It provides the company with a good rating buffer to withstand any deterioration in the current operating environment or to pursue growth opportunities. Should the company achieve and sustain its cost-cutting...

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