South32 Limited (S32 LN): 1Q27 operational results: Copper production lower than expectations

HSBC Equity Snap on South32 (S32 LN, TP GBp255; S32 AU, TP AUD4.80; S32 SJ, TP ZAR56.00; all Hold). 1Q27 production was lower than consensus for copper and at Cannington, while manganese production was strong and ahead of expectations, and FY27 production guidance was unchanged. Copper production at Sierra Gorda was 18.7kt, up 2% q-o-q and 17% y-o-y on higher grades but below consensus and HSBC estimates. At Cannington, silver fell 13% q-o-q and 28% y-o-y to 1,808koz, lead fell 25% q-o-q and 30% y-o-y to 16kt, and zinc rose 6% q-o-q but fell 23% y-o-y to 8.8kt on lower grades and operational constraints. Australian manganese was 902kwmt (+6% q-o-q, +15% y-o-y) and South African manganese 588kwmt (+7% q-o-q, +11% y-o-y). Alumina production was 1,311kt and aluminium 217kt, flat q-o-q and y-o-y. Net cash rose to USD297m, USD13m was returned via buyback with USD196m remaining under the USD2.6bn capital management programme, and shareholders approved the sale of aluminium value chain assets