Financial Results: Half Year Ended 31.12.2023

Companies

South32 Limited (DI) (S32)

UK 100

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US$M	H1 FY24	H1 FY23	%
Underlying revenue	3,881	4,524	(14%)
Profit after tax	53	685	(92%)
Underlying earnings	40	560	(93%)

Financial Highlights
US$M	H1 FY24	H1 FY23	% Change
Revenue	3,133	3,696	(15%)
Profit before tax and net finance income/(costs)	75	871	(91%)
Profit after tax	53	685	(92%)
Basic earnings per share (US cents)⁽²⁾	1.2	14.9	(92%)
Ordinary dividends per share (US cents)⁽³⁾	0.4	4.9	(92%)
Other financial measures
Underlying revenue⁽⁴⁾	3,881	4,524	(14%)
Underlying EBITDA⁽⁵⁾	708	1,364	(48%)
Underlying EBITDA margin⁽⁶⁾	19.0 %	31.5 %	(12.5%)
Underlying EBIT⁽⁵⁾	236	922	(74%)
Underlying EBIT margin⁽⁷⁾	6.1 %	21.3 %	(15.2%)
Underlying earnings⁽⁵⁾	40	560	(93%)
Basic Underlying earnings per share (US cents)⁽²⁾	0.9	12.2	(93%)
ROIC⁽⁸⁾	1.3 %	12.0 %	(10.7%)
Ordinary shares on issue (million)	4,529	4,572	(1%)

•	Delivered record half-year Group aluminium production, and increased zinc and nickel production by 20% in Q2 FY24;
•	Finalised new industrial agreements at Illawarra Metallurgical Coal and Cannington;
•	Completed a Group-wide review of costs to deliver further efficiencies and reduce expenditure;
•	FY24 production guidance is unchanged and we expect to deliver a 7%⁽¹⁵⁾ increase in production volumes in H2 FY24;
•	FY24 Operating unit cost guidance has been lowered or maintained across the majority of our operations;
•	Invested US$188M at Hermosa as we installed critical path infrastructure and progressed study work and federal permitting for our Taylor and Clark deposits;
•	Progressed the feasibility study for the fourth grinding line expansion at Sierra Gorda, ahead of a planned final investment decision in Q4 FY24;
•	Continued our investment in greenfield exploration to discover our next generation of base metal mines, spending US$19M in targeted prospective regions; and
•	Progressed decarbonisation programs to support our target⁽¹⁸⁾ to reduce operational greenhouse gas (GHG) emissions by 50% by 2035, completing the conversion of Worsley Alumina's first coal-fired boiler to natural gas.

•	Sierra Gorda (+US$47M) and manganese (+US$71M) joint venture adjustments: adjustments to reconcile the statutory equity accounting position to a proportional consolidation basis; and
•	Net impairment loss of financial assets (+US$48M): periodic revaluation of the shareholder loan receivable from Sierra Gorda reflecting copper prices and other macroeconomic assumptions. An offsetting amount is recorded in the Sierra Gorda joint venture adjustments noted above.

Profit to Underlying EBITDA reconciliation
US$M	H1 FY24	H1 FY23
Profit before tax and net finance income/(costs)	75	871
Adjustments to derive Underlying EBIT:
Significant items	-	(138)
Sierra Gorda joint venture adjustments	47	(57)
Manganese joint venture adjustments	71	101
Exchange rate (gains)/losses on the restatement of monetary items	13	(48)
Net impairment loss/(reversal) of financial assets	48	214
Net impairment loss/(reversal) of non-financial assets	-	(4)
Gains on non-trading derivative instruments, contingent consideration and other investments measured at fair value through profit and loss	(18)	(17)
Total adjustments to derive Underlying EBIT	161	51
Underlying EBIT	236	922
Underlying depreciation and amortisation	472	442
Underlying EBITDA	708	1,364

Profit/(loss) to Underlying earnings reconciliation
US$M	H1 FY24	H1 FY23
Profit after tax	53	685
Total adjustments to derive Underlying EBIT	161	51
Total adjustments to derive Underlying net finance costs	(109)	(102)
Total adjustments to derive Underlying income and royalty related tax expense	(65)	(74)
Underlying earnings	40	560

Earnings Analysis	US$M	Commentary
H1 FY23 Underlying EBIT	922
Change in sales price	(396)	Lower average realised prices for our commodities, including: Aluminium (-US$136M) and alumina (-US$33M) Nickel (-US$121M) Manganese (-US$102M) Energy coal (-US$22M) Partially offset by higher average realised prices for silver (+US$15M) and copper (+US$8M)
Net impact of price-linked costs	231	Lower caustic soda prices at Worsley Alumina (+US$54M) and Brazil Alumina (+US$11M) Lower aluminium smelter raw material input prices (+US$60M), including pitch and coke Lower price-linked royalties (+US$30M) Lower coal, fuel oil and diesel prices (+US$28M) Lower freight and distribution costs (+US$25M) Lower electricity prices at Illawarra Metallurgical and Brazil Aluminium, partially offset by higher gas prices at Cannington (+US$13M)
Change in exchange rates	33	Weaker South African rand (+US$42M) and Australian dollar (+US$28M) Partially offset by a stronger Colombian peso (-US$16M), Brazilian real (-US$12M) and Chilean peso (-US$9M)
Change in inflation	(116)	Inflation-linked indexation of our Southern African aluminium smelter electricity prices (-US$27M) General inflation across Australia (-US$43M), South America (-US$29M) and Southern Africa (-US$17M)
Change in sales volume	(260)	Lower volumes, mostly at Illawarra Metallurgical Coal (-US$267M) as well as Sierra Gorda (-US$44M), Cerro Matoso (-US$36M) and Mozal Aluminium (-US$32M) Partially offset by higher volumes at Brazil Aluminium (+US$50M), Cannington (+US$44M), Australia Manganese (+US$34M) and Worsley Alumina (+US$20M)
Controllable costs	(131)	Inventory and volume related movements (-US$102M) including a planned drawdown of finished goods at Australia Manganese to support higher sales volumes Higher contractor and maintenance costs (-US$39M) including at Illawarra Metallurgical Coal to support the two completed longwall moves and at Australia Manganese to deliver planned mining activity A planned workforce payment at Sierra Gorda (-US$20M), following the finalisation of a new, three-year industrial agreement Partially offset by lower energy costs at Sierra Gorda (+US$20M), following the transition to cost efficient, 100% renewable energy supply
Other	(47)	Higher Group depreciation and amortisation, and our share of the loss from Mineração Rio do Norte (MRN) due to lower bauxite prices
H1 FY24 Underlying EBIT	236

Underlying net finance costs reconciliation
US$M	H1 FY24	H1 FY23
Unwind of discount applied to closure and rehabilitation provisions	(76)	(51)
Interest on lease liabilities	(28)	(28)
Interest on senior unsecured notes	(16)	(15)
Other	2	6
Underlying net finance costs	(118)	(88)
Add back earnings adjustment for exchange rate variations on net debt	(1)	4
Sierra Gorda joint venture adjustments⁽²²⁾	91	85
Manganese joint venture adjustments⁽²²⁾	19	13
Total adjustments to derive Underlying net finance costs	109	102
Net finance income/(costs)	(9)	14

Underlying income tax expense reconciliation and Underlying ETR
US$M	H1 FY24	H1 FY23
Underlying EBIT	236	922
Include: Underlying net finance costs	(118)	(88)
Remove: Share of (profit)/loss of EAIs	11	(7)
Underlying profit before tax	129	827

Income tax expense	13	200
Tax effect of earnings adjustments to Underlying EBIT	4	1
Tax effect of earnings adjustments to Underlying net finance costs	1	(1)
Exchange rate variations on tax balances	20	(5)
Significant items	-	(23)
Sierra Gorda joint venture adjustment relating to income tax⁽²²⁾	(6)	6
Sierra Gorda joint venture adjustment relating to royalty related tax⁽²²⁾	1	4
Manganese joint venture adjustment relating to income tax⁽²²⁾	24	56
Manganese joint venture adjustment relating to royalty related tax⁽²²⁾	21	36
Total adjustments to derive Underlying income tax expense	65	74
Underlying income tax expense	78	274
Underlying effective tax rate	60.5 %	33.1 %

Free cash flow from operations excluding EAIs
US$M	H1 FY24	H1 FY23
Profit from operations	75	871
Non-cash or non-operating items	421	377
Share of (profit)/loss from EAIs	9	(241)
Change in working capital	(276)	(152)
Cash generated from operations	229	855
Total capital expenditure, excluding EAIs, including intangibles and capitalised exploration	(584)	(416)
Operating cash flows generated from operations after capital expenditure	(355)	439
Net interest paid⁽²⁹⁾	(26)	(25)
Income tax paid	(96)	(347)
Free cash flow from operations	(477)	67

Working capital movement
US$M	H1 FY24	Commentary
Trade and other receivables	(88)	Timing of shipments weighted toward the end of the period
Inventories	(84)	Continued ramp up of Brazil Aluminium, and temporary shipping delays at Hillside Aluminium due to port congestion at Richards Bay
Trade and other payables	(84)	Timing of raw material purchases
Provisions and other liabilities	(20)
Total working capital movement	(276)

•	Safe and reliable capital expenditure increased by US$103M to US$335M, reflecting elevated capital expenditure at Illawarra Metallurgical Coal as we transition Appin to a more efficient single longwall configuration from FY25⁽³¹⁾, and install additional ventilation capacity to enable mining in Appin's Area 7 until at least 2039⁽³¹⁾;
•	Improvement and life extension capital expenditure increased by US$16M to US$40M as we advanced decarbonisation projects at Worsley Alumina and the De-bottlenecking Phase Two project at Brazil Alumina;
•	Growth capital expenditure increased by US$92M to US$188M at Hermosa, as we constructed critical path infrastructure and advanced studies for the Taylor zinc-lead-silver and Clark battery-grade manganese deposits; and
•	Intangibles and capitalised exploration expenditure was US$21M, as we completed multiple exploration programs across our portfolio focused on base metals.

•	Capital expenditure for our manganese EAIs increased by US$22M to US$66M, as Australia Manganese progressed construction of the Eastern Lease South life extension project, and South Africa Manganese continued work to access new mining areas and improve rail efficiencies; and
•	Capital expenditure for our Sierra Gorda EAI increased by US$17M to US$104M, as the operation continued its investment in deferred stripping, additional tailings storage infrastructure and the plant de-bottlenecking project, together with the feasibility study for the fourth grinding line expansion project.
Capital expenditure (South32 share)^(21)(30)
US$M		H1 FY24	H1 FY23
Safe and reliable capital expenditure		(335)	(232)
Improvement and life extension capital expenditure		(40)	(24)
Growth capital expenditure		(188)	(96)
Intangibles and the capitalisation of exploration expenditure		(21)	(64)^(a)
Total capital expenditure (excluding EAIs)		(584)	(416)
EAIs capital expenditure		(170)	(131)
Total capital expenditure (including EAIs)		(754)	(547)

Net debt
US$M	H1 FY24	FY23
Cash and cash equivalents	702	1,258
Lease liabilities	(682)	(674)
Other interest bearing liabilities	(1,111)	(1,067)
Net debt	(1,091)	(483)

Dividends announced
Period	Dividend per share (US cents)	US$M	Franking	Pay-out ratio
H1 FY22	8.7	405	100%	40%
H2 FY22	14.0	648	100%	41%
August 2022 special dividend	3.0	139	100%	N/A
H1 FY23	4.9	224	100%	40%
H2 FY23	3.2	145	100%	41%
H1 FY24	0.4	18	100%	45%

Dividend timetable	Date
Announce currency conversion into rand	1 March 2024
Last day to trade cum dividend on the Johannesburg Stock Exchange (JSE)	5 March 2024
Ex-dividend date on the JSE	6 March 2024
Ex-dividend date on the ASX and London Stock Exchange (LSE)	7 March 2024
Record date (including currency election date for ASX)	8 March 2024
Payment date	4 April 2024

Production guidance (South32 share)⁽²¹⁾
	FY23	H1 FY24	FY24e^(a)	FY25e^(a)	Key guidance assumptions
Worsley Alumina					Guidance unchanged Planned calciner maintenance completed in Q1 FY24 and scheduled for Q3 FY24
Alumina production (kt)	3,839	1,934	4,000	4,000
Brazil Alumina (non-operated)					Guidance unchanged Additional maintenance reflected in guidance, following third-party power outages in H1 FY24
Alumina production (kt)	1,262	640	1,300	1,350
Brazil Aluminium (non-operated)					Guidance unchanged Expected to increase by 45% in FY24 and 30% in FY25, as the smelter ramps up toward nameplate capacity (179ktpa, 40% basis) in H2 FY26
Aluminium production (kt)	69	50	100	130
Hillside Aluminium⁽³³⁾					Guidance unchanged (subject to load-shedding) Expected to test its maximum technical capacity
Aluminium production (kt)	719	359	720	720
Mozal Aluminium⁽³³⁾					Guidance unchanged (subject to load-shedding) Expected to progressively increase the number of pots in operation across CY24
Aluminium production (kt)	345	166	320	372
Sierra Gorda (non-operated)					Guidance unchanged Expected to continue to benefit from the plant de-bottlenecking project, together with higher planned copper grades in H2 FY24 and FY25 Molybdenum plant performance and recoveries expected to improve from Q4 FY24
Ore processed (Mt)	21.2	10.9	21.8	21.8
Payable copper equivalent production (kt)⁽³⁴⁾	86.5	38.6	78.7	91.8
Payable copper production (kt)	70.7	31.6	67.0	71.0
Payable molybdenum production (kt)	1.2	0.5	0.8	2.2
Payable gold production (koz)	28.8	13.4	22.5	25.0
Payable silver production (koz)	630	295	550	550
Cannington					Guidance unchanged Improved plant throughput and higher planned silver and lead grades expected in FY24 Further increase in plant throughput in FY25, offset by lower planned metal grades
Ore processed (kdmt)	2,156	1,139	2,300	2,400
Payable zinc equivalent production (kt)⁽³⁵⁾	259.6	147.2	287.2	275.8
Payable silver production (koz)	11,183	6,704	12,500	12,000
Payable lead production (kt)	101.7	58.8	115.0	110.0
Payable zinc production (kt)	59.2	29.0	62.0	60.0
Cerro Matoso					Guidance unchanged Ore Sorting and Mechanical Ore Concentration (OSMOC) project expected to partially offset natural grade decline
Ore processed (kdmt)	2,807	1,317	2,700	2,750
Payable nickel production (kt)	40.8	18.3	40.5	35.0
Illawarra Metallurgical Coal					Guidance unchanged Volumes remain weighted to H2 FY24 due to the timing and duration of planned longwall moves
Total coal production (kt)	6,520	2,045	5,000	5,500
Metallurgical coal production (kt)	5,497	1,787	4,400	4,700
Energy coal production (kt)	1,023	258	600	800
Australia Manganese					Guidance unchanged (subject to wet season) Expected to continue strong primary output and return the PC02 circuit to nameplate in Q4 FY24
Manganese ore production (kwmt)	3,545	1,679	3,400	3,400
South Africa Manganese					Guidance unchanged (subject to demand) We expect to continue to use higher cost trucking to optimise sales volumes FY25 guidance is subject to market demand
Manganese ore production (kwmt)	2,108	1,111	2,000	Subject to demand

South32 share	H1 FY24	H1 FY23
Ore mined (Mt)	11.9	15.4
Ore processed (Mt)	10.9	10.7
Ore grade processed (%, Cu)	0.37	0.45
Payable copper equivalent production (kt)⁽³⁴⁾	38.6	44.8
Payable copper production (kt)	31.6	37.9
Payable molybdenum production (kt)	0.5	0.4
Payable gold production (koz)	13.4	15.3
Payable silver production (koz)	295	338
Payable copper sales (kt)	32.5	38.4
Payable molybdenum sales (kt)	0.7	0.8
Payable gold sales (koz)	13.8	15.4
Payable silver sales (koz)	300	345
Realised copper sales price (US$/lb)	3.56	3.41
Realised molybdenum sales price (US$/lb)	20.82	20.78
Realised gold sales price (US$/oz)	1,957	1,688
Realised silver sales price (US$/oz)	23.3	17.4
Operating unit cost (US$/t ore processed)⁽⁴²⁾	18.8	16.6

South32 share (US$M)	H1 FY24	H1 FY23
Underlying revenue	322	357
Underlying EBITDA	117	179
Underlying EBIT	49	107
Net operating assets^(a)	1,591	1,588
Capital expenditure	98	86
Safe and reliable	83	65
Improvement and life extension	15	21
Exploration expenditure	6	3
Exploration expensed	-	2

South32 share	H1 FY24	H1 FY23
Ore mined (kwmt)	1,150	1,123
Ore processed (kdmt)	1,139	1,142
Ore grade processed (g/t, Ag)	211	175
Ore grade processed (%, Pb)	6.0	5.5
Ore grade processed (%, Zn)	3.4	3.6
Payable zinc equivalent production (kt)⁽³⁵⁾	147.2	130.8
Payable silver production (koz)	6,704	5,474
Payable lead production (kt)	58.8	52.4
Payable zinc production (kt)	29.0	30.4
Payable silver sales (koz)	6,529	5,083
Payable lead sales (kt)	56.6	51.3
Payable zinc sales (kt)	28.3	27.5
Realised silver sales price (US$/oz)	22.5	20.1
Realised lead sales price (US$/t)	1,979	2,008
Realised zinc sales price (US$/t)	2,085	2,436
Operating unit cost (US$/t ore processed)⁽⁴²⁾	150	136

South32 share (US$M)	H1 FY24	H1 FY23
Underlying revenue	318	272
Underlying EBITDA	147	117
Underlying EBIT	109	82
Net operating assets^(a)	183	172
Capital expenditure	23	33
Safe and reliable	23	32
Improvement and life extension	-	1
Exploration expenditure	5	3
Exploration expensed	3	3

Operating unit cost⁽³⁶⁾
	H1 FY23	H1 FY24	FY24 prior guidance^(a)	FY24 new guidance^(b)	H1 FY24 to H1 FY23 commentary FY24e^(c) new guidance to FY24 prior guidance commentary
Worsley Alumina
(US$/t)	288	258	290	270	H1 FY24: decreased by 10%, with lower caustic soda prices FY24e guidance lowered by 7%, with lower caustic prices
Brazil Alumina (non-operated)
(US$/t)	364	325	Not provided	Not provided	H1 FY24: decreased by 11%, with lower caustic soda, energy and bauxite prices H2 FY24e: Expected to benefit from a further reduction in raw material input prices
Brazil Aluminium (non-operated)
(US$/t)	5,876	4,025	Not provided	Not provided	H1 FY24: decreased by 32%, with higher volumes, and lower raw material input and energy prices H2 FY24e: Expected to benefit from higher volumes in H2 FY24 as the smelter continues to ramp up
Hillside Aluminium
(US$/t)	2,276	2,135	Not provided	Not provided	H1 FY24: decreased by 6%, with lower raw material input prices and a weaker South African rand, partially offset by higher energy prices H2 FY24e: Will continue to be influenced by the price of raw material inputs, the South African rand and inflation-linked energy costs
Mozal Aluminium
(US$/t)	2,237	2,461	Not provided	Not provided	H1 FY24: increased by 10%, due to lower volumes and higher maintenance costs H2 FY24e: Expected to remain elevated, with the number of pots in operation to progressively increase across CY24
Sierra Gorda (non-operated)
(US$/t)^(d)	16.6	18.8	16.0	17.0	H1 FY24: increased by 13%, with the benefit of cost efficient, 100% renewable electricity, more than offset by a planned workforce payment following a new three-year industrial agreement FY24e guidance increased by 6%, with sequentially lower costs in H2 FY24
Cannington
(US$/t)^(d)	136	150	155	155	H1 FY24: increased by 10%, with higher planned contractor and energy costs FY24e guidance is unchanged
Cerro Matoso
(US$/lb)	4.93	5.57	5.30	5.20	H1 FY24: increased by 13%, with a stronger Colombian peso and lower H1 FY24 volumes FY24e guidance lowered by 2%, with further cost efficiencies and higher volumes expected in H2 FY24
Illawarra Metallurgical Coal
(US$/t)	124	167	140	150	H1 FY24: increased by 35%, due to the volume impact of the two planned longwall moves FY24e guidance increased by 7%, due to higher price-linked royalties
Australia Manganese
(US$/dmtu, FOB)	1.76	2.15	2.15	2.15	H1 FY24: increased by 22%, due to increased mining activity and contractor costs to deliver planned volumes FY24e guidance is unchanged
South Africa Manganese
(US$/dmtu, FOB)	2.67	2.59	2.60	2.60	H1 FY24: decreased by 3%, with higher volumes, a weaker South African rand and lower price-linked royalties FY24e guidance is unchanged

Capital expenditure excluding exploration and intangibles (South32 share)⁽²¹⁾
US$M	H1 FY24	FY24e^(a)
Worsley Alumina	34	70
Brazil Alumina	38	60
Brazil Aluminium	4	10
Hillside Aluminium	24	40
Mozal Aluminium	11	20
Cannington	23	40
Cerro Matoso	21	35
Illawarra Metallurgical Coal	180	310
Safe and reliable capital expenditure (excluding EAIs)	335	585
Worsley Alumina	24	45
Brazil Alumina	13	20
Other operations	3	5
Improvement and life extension capital expenditure (excluding EAIs)	40	70
Hermosa	188	390
Growth capital expenditure	188	390
Total capital expenditure (excluding EAIs)	563	1,045
Total capital expenditure (including EAIs)	727	1,360

Capital expenditure for EAIs excluding exploration and intangibles (South32 share)⁽²¹⁾
US$M	H1 FY24	FY24e^(a)
Sierra Gorda	83	160
Australia Manganese	24	55
South Africa Manganese	20	30
Safe and reliable capital expenditure (EAIs)	127	245
Sierra Gorda	15	30
Australia Manganese	16	30
South Africa Manganese	6	10
Improvement and life extension capital expenditure (EAIs)	37	70
Total capital expenditure (EAIs)	164	315

Capitalised exploration (South32 share)⁽²¹⁾
US$M	H1 FY24	FY24e^(a)
Capitalised exploration (excluding EAIs)	21	35
EAIs capitalised exploration	6	10
Capitalised exploration (including EAIs)	27	45

Other expenditure guidance
	H1 FY24	FY24e^(a)	Commentary
Group and unallocated expense in Underlying EBIT (excluding greenfield exploration and third party products and services EBIT)
(US$M)	39	100	Guidance unchanged H1 FY24 included non-core royalty receipts of US$5M
Underlying depreciation and amortisation
(US$M)	472	930	Guidance unchanged
Underlying net finance costs
(US$M)	118	á 220	Guidance revised to US$220M (from US$200M) Reflects balance sheet position as at H1 FY24
Greenfield exploration
(US$M)	19	30	Guidance unchanged Greenfield exploration activity targeting base metals in the Americas, Australia and Europe, subject to the timing of programs

Operations table (South32 share)⁽²¹⁾
	Underlying revenue		Underlying EBIT
US$M	H1 FY24	H1 FY23	H1 FY24	H1 FY23
Worsley Alumina	653	659	68	33
Brazil Alumina	234	247	(9)	(19)
Brazil Aluminium	91	47	(74)	(70)
Hillside Aluminium	758	861	27	62
Mozal Aluminium	397	482	(48)	65
Sierra Gorda	322	357	49	107
Cannington	318	272	109	82
Hermosa	-	-	(9)	(9)
Cerro Matoso	238	395	(14)	154
Illawarra Metallurgical Coal	520	801	111	340
Australia Manganese	318	355	67	149
South Africa Manganese	152	175	3	25
Third party products and services⁽⁴⁰⁾	262	249	14	12
Inter-segment / Group and unallocated	(382)	(376)	(58)	(9)
South32 Group	3,881	4,524	236	922

South32 share^(a)	H1 FY24	H1 FY23
Manganese ore production (kwmt)	1,111	1,093
Manganese ore sales (kwmt)	1,082	1,032
Realised external manganese ore sales price (US$/dmtu, FOB)^(46)(49)	3.03	3.57
Ore operating unit cost (US$/dmtu, FOB)^(48)(49)	2.59	2.67

South32 share (US$M)^(a)	H1 FY24	H1 FY23
Underlying revenue	152	175
Manganese ore	152	175
Manganese alloy	-	-
Underlying EBITDA	14	35
Manganese ore	17	36
Manganese alloy	(3)	(1)
Underlying EBIT	3	25
Manganese ore	6	26
Manganese alloy	(3)	(1)
Net operating assets/(liabilities)^(b)	159	143
Manganese ore	224	195
Manganese alloy	(65)	(52)
Capital expenditure	26	11
Safe and reliable	20	7
Improvement and life extension	6	4
Exploration expenditure	-	1
Exploration expensed	-	1

(1)	Net tangible assets as at 31 December 2023 includes all right-of-use assets and lease liabilities, in accordance with AASB 16 Leases.
(2)	H1 FY24 basic earnings per share is calculated as Profit after tax divided by the weighted average number of shares for H1 FY24 (4,523 million). H1 FY24 basic Underlying earnings per share is calculated as Underlying earnings divided by the weighted average number of shares for H1 FY24. H1 FY23 basic earnings per share is calculated as Profit after tax divided by the weighted average number of shares for H1 FY23 (4,596 million). H1 FY23 basic Underlying earnings per share is calculated as Underlying earnings divided by the weighted average number of shares for H1 FY23.
(3)	H1 FY24 ordinary dividends per share is calculated as H1 FY24 ordinary dividend announced (US$18M) divided by the number of shares on issue at 31 December 2023 (4,529 million).
(4)	Underlying revenue includes revenue from third party products and services.
(5)	The underlying information reflects the Group's interest in material equity accounted joint ventures and is presented on a proportional consolidation basis. Underlying EBIT is profit before net finance income/(costs), tax and any earnings adjustments, including impairments. Underlying EBITDA is Underlying EBIT before Underlying depreciation and amortisation. Underlying earnings is Profit after tax and earnings adjustment items. Underlying earnings is the key measure that South32 uses to assess the performance of the South32 Group, make decisions on the allocation of resources and assess senior management's performance. In addition, the performance of each of the South32 operations and operational management is assessed based on Underlying EBIT. In order to calculate Underlying earnings, Underlying EBIT and Underlying EBITDA, the following items are adjusted as applicable each period, irrespective of materiality: • Exchange rate (gains)/losses on restatement of monetary items; • Impairment losses/(reversals); • Net (gains)/losses on disposal and consolidation of interests in operations; • (Gains)/losses on non-trading derivative instruments, contingent consideration and other investments measured at fair value through profit or loss; • Major corporate restructures; • Joint venture adjustments; • Exchange rate variations on net cash/(debt); • Tax effect of earnings adjustments; and • Exchange rate variations on tax balances In addition, items that do not reflect the underlying operations of South32, and are individually, or in combination with other related earnings adjustments, significant to the financial statements, are excluded to determine Underlying earnings. When applicable, significant items are detailed in the Financial Information.
(6)	Comprises Underlying EBITDA excluding third party products and services EBITDA, divided by Underlying revenue excluding third party products and services revenue. Also referred to as operating margin.
(7)	Comprises Underlying EBIT excluding third party products and services EBIT, divided by Underlying revenue excluding third party products and services revenue.
(8)	Return on invested capital (ROIC) is a key measure that South32 uses to assess performance. ROIC is calculated as Underlying EBIT less the discount on rehabilitation provisions included in Underlying net finance costs, tax effected by the Group's Underlying effective tax rate (ETR) including our material equity accounted investments on a proportional consolidation basis, divided by the sum of fixed assets (excluding any rehabilitation assets, the impact of any impairments or impairment reversals, and unproductive capital) and inventories.
(9)	Significant hazards frequency: (The sum of significant hazards x 1,000,000) ÷ exposure hours. This is stated in units of per million hours worked for employees and contractors. A significant hazard is something that has the potential to cause harm, ill health or injury, or damage to property, plant or the environment.
(10)	To ensure that incident classification definitions are applied uniformly across our workforce, we have adopted the United States Government Occupational Safety and Health Administration (OSHA) and the International Council on Mining and Metals (ICMM) guidelines for the recording and reporting of occupational injuries and illnesses.
(11)	Total Recordable Injury Frequency (TRIF): (The sum of recordable injuries x 1,000,000) ÷ exposure hours. This is stated in units of per million hours worked for employees and contractors.
(12)	Lost Time Injury Frequency (LTIF): (The sum of lost time injuries x 1,000,000) ÷ exposure hours. This is stated in units of per million hours worked for employees and contractors.
(13)	Calculated by taking the increase in controllable costs from H1 FY23 to H1 FY24 divided by the Group's underlying H1 FY23 cost base excluding third party product costs.
(14)	Refers to aluminium produced using renewable power.
(15)	Group payable copper equivalent production in H2 FY24e, compared to H1 FY24, calculated by applying FY23 realised prices for all operations.
(16)	US$98M was remaining to be returned under our current capital management program. Since inception, US$1.7B has been returned via the on-market share buy-back (795M shares at an average price of A$3.05 per share) and US$525M returned in the form of special dividends.
(17)	Refer to market release "Final Investment Approval to Develop Hermosa's Taylor Deposit" dated 15 February 2024.
(18)	Target is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions. Our medium-term target is to halve our operational greenhouse gas (GHG) emissions by 2035 compared to our FY21 baseline. FY21 baseline adjusted to exclude GHG emissions from South Africa Energy Coal and TEMCO, which were divested in FY21.
(19)	Sales price variance reflects the revenue impact of changes in commodity prices, based on the current period's sales volume. Price-linked costs variance reflects the change in royalties together with the change in input costs driven by changes in commodity prices or market traded consumables. Foreign exchange reflects the impact of exchange rate movements on local currency denominated costs and sales. Sales volume variance reflects the revenue impact of sales volume changes, based on the comparative period's sales prices. Controllable costs variance represents the impact from changes in the Group's controllable local currency cost base, including the variable cost impact of production volume changes on expenditure, and period-on-period movements in inventories. The controllable cost variance excludes earnings adjustments including significant items.
(20)	Underlying net finance costs and Underlying income tax expense are actual H1 FY24 results, not half-on-half variances.
(21)	South32's ownership shares of operations are presented as follows: Worsley Alumina (86% share), Brazil Alumina (36% share), Brazil Aluminium (40% share), Hillside Aluminium (100%), Mozal Aluminium (63.7% share), Sierra Gorda (45% share), Cannington (100%), Hermosa (100%), Cerro Matoso (99.9% share), Illawarra Metallurgical Coal (100%), Australia Manganese (60% share), South Africa Manganese ore (54.6% share) and South Africa Manganese alloy (60% share).
(22)	The underlying information reflects the Group's interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group's management to assess their performance. The joint venture adjustments reconcile the proportional consolidation to the equity accounting position included in the Group's consolidated financial statements.
(23)	Underlying ETR is Underlying income tax expense, including royalty related tax, divided by Underlying profit subject to tax.
(24)	The corporate tax rates of the geographies where the Group operates include: Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34% and Chile 27%.
(25)	Mozal Aluminium is subject to a royalty on revenues instead of income tax which is included in Operating costs.
(26)	Australia Manganese is subject to a royalty related tax equal to 20% of adjusted EBIT which is included in Underlying tax expense.
(27)	Sierra Gorda is subject to a royalty related tax based on the amount of copper sold and the mining operating margin, the rate is between 5% and 14% for annual sales over 50kt of refined copper. This royalty is included in Underlying tax expense.
(28)	H1 FY24 net distributions from our material equity accounted joint ventures comprises of dividends (US$76M), a net drawdown of shareholder loans (US$34M) from manganese and a distribution (US$18M) from Sierra Gorda. The distribution from Sierra Gorda comprised a repayment of US$18M of accrued interest.
(29)	Net interest paid excludes distributions from material equity accounted investments.
(30)	Total capital expenditure comprises Capital expenditure, capitalised exploration and evaluation expenditure and the purchase of intangibles. Capital expenditure comprises safe and reliable capital expenditure, improvement and life extension capital expenditure (including decarbonisation), and growth capital expenditure.
(31)	The information in this announcement that relates to the Production Target for Illawarra Metallurgical Coal is based on 21% Proved and 79% Probable Coal Reserves from Bulli (Appin) and was originally disclosed in "September 2023 Quarterly Report" dated 23 October 2023. The Coal Reserves estimates underpinning the Production Target have been prepared by Competent Persons and reported in accordance with the JORC Code. The Coal Resources and Coal Reserves estimates are available to view in South32's FY23 Annual Report published on 8 September 2023 and is available to view on www.south32.net. South32 confirms that all the material assumptions underpinning the Production Target in the initial public report continue to apply and have not materially changed. The stated Production Target is based on South32's current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met.
(32)	Group payable copper equivalent production in FY25e, compared to FY24e, calculated by applying FY23 realised prices for all operations. FY25e assumes South Africa Manganese production of 2,000kwmt, which is subject to market conditions and our continued use of higher cost trucking.
(33)	Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.
(34)	Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY23 realised prices for copper (US$3.51/lb), molybdenum (US$21.28/lb), gold (US$1,821/oz) and silver (US$21.9/oz) have been used for FY23, H1 FY24, FY24e and FY25e.
(35)	Payable zinc equivalent (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY23 realised prices for zinc (US$2,151/t), lead (US$1,919/t) and silver (US$21.1/oz) have been used for FY23, H1 FY24, FY24e and FY25e.
(36)	Operating unit cost is Underlying revenue less Underlying EBITDA, excluding third party products and services, divided by sales volumes. Operating cost is Underlying revenue less Underlying EBITDA excluding third party products and services. Additional manganese disclosures are included in footnotes 47 and 49.
(37)	FY24 prior Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY24, including: an alumina price of US$349/t; an average blended coal price of US$210/t for Illawarra Metallurgical Coal; a manganese ore price of US$4.85/dmtu for 44% manganese product; a nickel price of US$8.90/lb; a silver price of US$24.5/troy oz; a lead price of US$2,131/t (gross of treatment and refining charges); a zinc price of US$2,446/t (gross of treatment and refining charges); a copper price of US$3.87/lb (gross of treatment and refining charges); a molybdenum price of US$22.5/lb (gross of treatment and refining charges); a gold price of US$1,984/troy oz; an AUD:USD exchange rate of 0.65; a USD:ZAR exchange rate of 18.98; a USD:COP exchange rate of 4,033; USD:CLP exchange rate of 876; and a reference price for caustic soda; which reflect forward markets as at July 2023 or our internal expectations.
(38)	FY24 new Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY24, including: an alumina price of US$340/t; an average blended coal price of US$296/t for Illawarra Metallurgical Coal; a manganese ore price of US$4.58/dmtu for 44% manganese product; a nickel price of US$8.67/lb; a silver price of US$22.7/troy oz; a lead price of US$2,105/t (gross of treatment and refining charges); a zinc price of US$2,446/t (gross of treatment and refining charges); a copper price of US$3.67/lb (gross of treatment and refining charges); a molybdenum price of US$19.22/lb (gross of treatment and refining charges); a gold price of US$1,892/troy oz; an AUD:USD exchange rate of 0.64; a USD:ZAR exchange rate of 19.12; a USD:COP exchange rate of 4,050; USD:CLP exchange rate of 924; and a reference price for caustic soda; which reflect forward markets as at January 2024 or our internal expectations.
(39)	Exploration Results and Exploration Targets: The information in this announcement that relates to the Exploration Results and Targets for Taylor, Clark, Peake and Flux is extracted from the announcement entitled (Final Investment Approval to Develop Hermosa's Taylor Deposit) published on 15 February 2024 and is available to view on www.south32.net. The information was prepared by D Bertuch, Competent Person in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. South32 confirms that the form and context in which the Competent Person's findings are presented have not been materially changed from the original market announcement.
(40)	H1 FY24 Third party products and services sold comprise US$42M for aluminium, US$3M for alumina, US$106M for coal, US$43M for freight services, US$53M for raw materials and US$15M for manganese. Underlying EBIT on third party products and services comprise nil for aluminium, US$2M for alumina, US$14M for coal, US$(2)M for freight services, nil for raw materials and nil for manganese. H1 FY23 Third party products and services sold comprise US$30M for aluminium, US$2M for alumina, US$60M for coal, US$63M for freight services, US$78M for raw materials and US$16M for manganese. Underlying EBIT on third party products and services comprise US$(1)M for aluminium, US$8M for alumina, US$6M for coal, US$(1)M for freight services, nil for raw materials and nil for manganese.
(41)	Refers to lower levels of GHG emissions when compared to the current state. Where used in relation to South32's products or portfolio, it refers to enhancement of existing methods, practices and technologies to substantially lower the level of embodied GHG emissions as compared to the current state.
(42)	Sierra Gorda and Cannington Operating unit cost is Underlying revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory may impact Operating unit costs.
(43)	Cerro Matoso realised nickel sales price is inclusive of by-products.
(44)	Illawarra Metallurgical Coal revenue includes metallurgical coal and energy coal sales revenue.
(45)	Australia Manganese: The information in this announcement that refers to Production Target and forecast financial information is based on Proved (62%) and Probable (38%) Ore Reserves. Production Target cautionary statement - The Mineral Resources and Ore Reserves underpinning the Production Target have been prepared by Competent Persons and reported in accordance with the JORC Code. The Resources and Reserves estimates are available to view in South32's FY23 Annual Report (http://www.south32.net) published on 8 September 2023. The stated Production Target is based on South32's current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met.
(46)	Volumes and prices do not include any third party trading that may be undertaken independently of equity production. Realised ore prices are calculated as external sales Underlying revenue less freight and marketing costs, divided by external sales volume.
(47)	Manganese Australia H1 FY24 average manganese content of external ore sales was 42.5% on a dry basis (H1 FY23: 44.2%). 97% of H1 FY24 external manganese ore sales (H1 FY23: 95%) were completed on a CIF basis. H1 FY24 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of US$30M (H1 FY23: US$36M), consistent with our FOB cost guidance.
(48)	FOB Ore Operating unit cost is Underlying revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volume.
(49)	Manganese South Africa H1 FY24 average manganese content of external ore sales was 38.7% on a dry basis (H1 FY23: 39.2%). 90% of H1 FY24 external manganese ore sales (H1 FY23: 86%) were completed on a CIF basis. H1 FY24 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of US$28M (H1 FY23: US$32M), consistent with our FOB cost guidance.

CONSOLIDATED INCOME STATEMENT		33
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME		34
CONSOLIDATED BALANCE SHEET		35
CONSOLIDATED CASH FLOW STATEMENT		36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY		37
NOTES TO FINANCIAL STATEMENTS
1.	Reporting entity	38
2.	Basis of preparation	38
3.	Segment information	39
4.	Dividends	45
5.	Earnings per share	45
6.	Interest bearing liabilities	46
7.	Net finance income/(costs)	46
8.	Financial assets and financial liabilities	47
9.	Equity accounted investments	50
10.	Subsequent events	50
DIRECTORS' DECLARATION		51
DIRECTORS' REPORT		52
LEAD AUDITOR'S INDEPENDENCE DECLARATION		54
INDEPENDENT AUDITOR'S REVIEW REPORT		55

US$M	Note	H1 FY24	H1 FY23
Revenue:
Group production		2,827	3,388
Third party products and services		306	308
	3	3,133	3,696
Other income		61	242
Expenses excluding finance costs		(3,110)	(3,308)
Share of profit/(loss) of equity accounted investments	9	(9)	241
Profit from operations		75	871
Comprising:
Group production		61	859
Third party products and services		14	12
Profit from operations		75	871
Finance income		116	111
Finance costs		(125)	(97)
Net finance income/(costs)	7	(9)	14
Profit before tax		66	885
Income tax expense		(13)	(200)
Profit for the period		53	685

Attributable to:
Equity holders of South32 Limited		53	685

Profit for the period attributable to equity holders of South32 Limited:
Basic earnings per share (cents)	5	1.2	14.9
Diluted earnings per share (cents)	5	1.2	14.8

	Attributable to equity holders of South32 Limited
US$M	Share capital	Treasury shares	Financial assets reserve⁽¹⁾	Employee share awards reserve⁽²⁾	Other reserves⁽³⁾	Accumulated losses	Total	Non-controlling interests	Total equity
Balance as at 1 July 2023	13,251	(51)	(14)	52	(3,591)	(271)	9,376	(1)	9,375
Profit for the period	-	-	-	-	-	53	53	-	53
Other comprehensive income/(loss)	-	-	(20)	-	-	-	(20)	-	(20)
Total comprehensive income/(loss)	-	-	(20)	-	-	53	33	-	33
Transactions with owners:
Dividends	-	-	-	-	-	(145)	(145)	-	(145)
Shares bought back and cancelled	(35)	-	-	-	-	-	(35)	-	(35)
Employee share entitlements for unvested awards, net of tax	-	-	-	14	-	-	14	-	14
Employee share awards vested and lapsed, net of tax	-	19	-	(20)	-	(7)	(8)	-	(8)
Purchase of shares by ESOP Trusts	-	(8)	-	-	-	-	(8)	-	(8)
Balance as at 31 December 2023	13,216	(40)	(34)	46	(3,591)	(370)	9,227	(1)	9,226

Balance as at 1 July 2022	13,469	(32)	(6)	45	(3,597)	901	10,780	(1)	10,779
Profit for the period	-	-	-	-	-	685	685	-	685
Other comprehensive income/(loss)	-	-	(2)	-	-	2	-	-	-
Total comprehensive income/(loss)	-	-	(2)	-	-	687	685	-	685
Transactions with owners:
Dividends	-	-	-	-	-	(784)	(784)	-	(784)
Shares bought back and cancelled	(143)	-	-	-	-	-	(143)	-	(143)
Employee share entitlements for unvested awards, net of tax	-	-	-	14	-	-	14	-	14
Employee share awards vested and lapsed, net of tax	-	13	-	(21)	-	3	(5)	-	(5)
Purchase of shares by ESOP Trusts	-	(13)	-	-	-	-	(13)	-	(13)
Balance as at 31 December 2022	13,326	(32)	(8)	38	(3,597)	807	10,534	(1)	10,533

•	Have been prepared in accordance with AASB 134 Interim Financial Reporting, IAS 34 Interim Financial Reporting and the Corporations Act 2001;
•	Have been prepared on a historical cost basis, except for post-retirement assets and obligations, derivative financial instruments and certain other financial assets and liabilities which are required to be measured at fair value;
•	Are presented in US dollars, which is the functional currency of the majority of the Group's operations, and all values are rounded to the nearest million dollars (US$M or US$ million) unless otherwise stated, in accordance with ASIC Corporations Instrument 2016/191; and
•	Have been prepared on the basis of accounting policies and methods of computation consistent with those applied in the consolidated financial statements for the year ended 30 June 2023.

Operating segment	Principal activities
Worsley Alumina	Integrated bauxite mine and alumina refinery in Australia
Brazil Alumina	Integrated bauxite mine and alumina refinery in Brazil
Brazil Aluminium	Aluminium smelter in Brazil
Hillside Aluminium	Aluminium smelter in South Africa
Mozal Aluminium	Aluminium smelter in Mozambique
Sierra Gorda	Copper mine in Chile
Cannington	Silver, lead and zinc mine in Australia
Hermosa	Base metals exploration and development project in the United States
Cerro Matoso	Integrated laterite ferronickel mine and smelting complex in Colombia
Illawarra Metallurgical Coal	Metallurgical coal mines in Australia
Australia Manganese	Manganese ore mine in Australia
South Africa Manganese	Manganese ore mines in South Africa

H1 FY24
US$M	Group underlying results	Sierra Gorda joint venture adjustments	Manganese joint venture adjustments	Group statutory results
Total revenue	3,881	(322)	(426)	3,133
Depreciation and amortisation	472	(68)	(69)	335
Share of profit/(loss) of equity accounted investments	(11)	3	(1)	(9)
Exploration expenditure	53	(6)	-	47
Capital expenditure	727	(98)	(66)	563
Equity accounted investments	47	103	264	414
Total assets	15,390	(453)	(539)	14,398
Total liabilities	6,164	(453)	(539)	5,172

H1 FY23
US$M	Gross	Tax	Net
Disposal of royalties	189	(56)	133
Assets write-off	(51)	16	(35)
Tax adjustments relating to the Sierra Gorda acquisition	-	17	17
Total significant items	138	(23)	115

Profit attributable to equity holders
US$M	H1 FY24	H1 FY23
Profit attributable to equity holders of South32 Limited (basic)	53	685
Profit attributable to equity holders of South32 Limited (diluted)	53	685

Weighted average number of shares
Million	H1 FY24	H1 FY23
Basic EPS denominator⁽¹⁾	4,523	4,596
Shares contingently issuable under employee share ownership plans	14	30
Diluted EPS denominator	4,537	4,626

Earnings per share
US cents	H1 FY24	H1 FY23
Basic EPS	1.2	14.9
Diluted EPS	1.2	14.8

H1 FY24	Held at FVTPL	Designated as FVOCI	Amortised cost	Total
US$M	Held at FVTPL	Designated as FVOCI	Amortised cost	Total
Financial assets
Cash and cash equivalents	-	-	702	702
Trade and other receivables⁽¹⁾⁽²⁾	108	-	446	554
Other financial assets:
Derivative contracts	1	-	-	1
Total current financial assets	109	-	1,148	1,257
Trade and other receivables⁽¹⁾⁽²⁾	-	-	1,954	1,954
Other financial assets:
Investments in equity instruments designated as FVOCI	-	97	-	97
Contingent consideration receivable	10	-	-	10
Total non-current financial assets	10	97	1,954	2,061
Total financial assets	119	97	3,102	3,318
Financial liabilities
Trade and other payables⁽³⁾	3	-	822	825
Interest bearing liabilities	-	-	435	435
Total current financial liabilities	3	-	1,257	1,260
Trade and other payables⁽³⁾	-	-	19	19
Interest bearing liabilities	-	-	1,358	1,358
Other financial liabilities:
Contingent consideration payable	18	-	-	18
Total non-current financial liabilities	18	-	1,377	1,395
Total financial liabilities	21	-	2,634	2,655

Level 1	Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities.
Level 2	Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).
Level 3	Valuation includes inputs that are not based on observable market data.