Mining company South32 grew its underlying EBITDA by 2% to US$1.1bn in the first half of FY2018.
Higher realised prices for most of its commodities gave rise to a US$273m increase in sales revenue, despite a significant reduction in coal and metal production at Illawarra Metallurgical Coal and Cannington, respectively.
The group's cost base was primarily impacted by external inflationary pressures such as a stronger Australian dollar and South African rand, higher price-linked royalties and rising raw material input costs.
Underlying EBIT increased 5% to US$724m, benefitting from a reduction in depreciation and amortisation. Underlying earnings increased 14% to US$544m.
The group's statutory profit after tax decreased by 12% to US$543m. The corresponding period's profit benefitted from the recognition of a fair value gain on non-trading derivative instruments of US$189m.
Graham Kerr, South32 CEO, said: "After a challenging start to the 2018 financial year, production for the majority of our operations is tracking on or ahead of schedule. We achieved record production at Australia Manganese and Mozal Aluminium, increased production guidance at South Africa Manganese in response to favourable market conditions, and delivered a 23% increase in payable nickel production at Cerro Matoso as ore grades improved.
"We also announced a 4.3 billion South African rand investment in the Klipspruit colliery, which will extend its life by approximately 20 years, and our decision to manage South Africa Energy Coal as a stand-alone business to sustainably improve its financial performance. This major strategic initiative will also allow us to transform the ownership of South Africa Energy Coal, consolidate our functions and further reduce duplication."
At 8:09am: (LON:S32) South32 Limited share price was -11.2p at 201.2p