South32 Ltd (ASX: S32) shares have been strong performers in the past month, advancing 11.5% into the green.
The mining giant also held its 2024 'hybrid' annual general meeting (AGM) this week, outlining major strategic shifts and operational updates.
At the time of writing, the South32 share price is swapping hands at $3.715 per share, still behind its 52-week highs of $4.02 apiece. Let's take a closer look.
What were the main highlights for South32 shares?
South32's AGM covered several critical topics, including the progress of its strategic review into several of its assets.
Chair Karen Wood emphasised the company's continued focus on avenues to "reshape" the business to continue its growth route.
During the year, the Board has continued its work in overseeing the development and implementation of South32's strategy, a strategy that has led our work since formation. A key element of that strategy has been the identification and pursuit of opportunities to sustainably reshape our business for the future.
Wood also highlighted two key portfolio changes: the final investment decision for the Taylor zinc-lead-silver deposit at Hermosa and the sale of Illawarra Metallurgical Coal.
These moves shift South32's focus towards base metals, which are expected to account for approximately 90% of the company's revenue going forward. This compares to about 50% at the time of its demerger in 2015.
Meanwhile, South32 CEO Graham Kerr shared insights into the company's financials.
As a reminder, South32 produced US$380 million in underlying earnings for FY24. Despite some operational challenges, such as impairments at Worsley Alumina and Cerro Matoso, the company returned US$198 million to shareholders through fully franked dividends and share buybacks.
But it hasn't been all smooth sailing. Several factors had an impact on results and South32 shares in recent weeks. According to CEO Kerr:
[F]inancial year 2024 was not without challenges. From a global perspective, the period was marked by a mix of recovery and volatility. Interest rates remained high and inflationary pressures persisted in some regions.
Severe weather also affected our business, with Cannington impacted by Tropical Cyclone Kirrily in January and Australia Manganese being significantly impacted by Tropical Cyclone Megan in March, resulting in the temporary suspension of operations on Groote Eylandt.
Cyclone Megan was a severe weather system, which resulted in widespread flooding and significan damage to critical infrastructure, including wharf and port infrastructure, and a critical bridge connecting northern pits of the Western Leases mining area and the processing plant.
What's next for South32?
Looking ahead, South32 was optimistic about its growth in the United States. It recently secured a US$166 million award negotiation from the US Department of Energy for its Clark manganese project. This could impact South32 shares moving forward.
This initiative positions South32 to support battery-grade manganese supply for the growing North American market, aligning with global trends toward energy transition.
The miner also has its priorities set on the sustainability front, "reshaping" its portfolio to align with global decarbonisation efforts.
During the year, we converted two coal-fired boilers to natural gas at Worsley Alumina, expected to reduce Worsley Alumina's operational greenhouse gas emissions by around 10 per cent against FY21 levels.
At our aluminium smelters in South Africa and Mozambique, we continue to work with stakeholders and governments on identifying and securing long-term, low-carbon energy solutions and I'm pleased that we reported a six per cent decrease in operational greenhouse gas emissions in FY24, compared to FY23 levels.
Net-net, Kerr said the company was focused on delivering value in its tenth year since it was carved out from the former BHP Billiton.
Our outlook is positive as we continue to optimise our business and seek to capitalise on our transformed portfolio which, more than ever, is focused on commodities critical for a low-carbon future.
Foolish takeout
South32's AGM reinforced the company's commitment to building long-term value for shareholders.
While this is a commitment, the next step is executing on the deliverables. That usually means lots of free cash flow, and steady earnings growth.
In the past year, the South32 share price has lifted more than 14%.
