South32 acted too early in cutting 300 jobs from Illawarra Coal last year, as the miner’s results paint a strong picture, University of Wollongong economist Professor Alex Frino said.
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The miner has announced a profit for the year to June of $1.5 billion, well up from the previous year’s $174 million.
Driving much of this was profit before tax of $358 million from the Illawarra Metallurgical Coal division.
Professor Frino, UoW’s deputy vice-chancellor for global strategy, said the result was good news but the cuts went too far.
“At the time, they said that their restructuring costs would save them about $10 million per annum,” he said.
“It seems that they went too early, to put it mildly.
With the benefit of hindsight those retrenchments were unnecessary
- Professor Alex Frino
“The profit before interest and tax generated by Illawarra Metallurgical Coal operations this year was … almost a quarter of South32’s total profit for the year.
“All in all good news for the region – though with the benefit of hindsight those retrenchments were unnecessary and probably opportunistic for the company.”
It remains to be seen how South32’s next balance sheet will be affected by almost three months of gas-related shutdowns recently at the Appin mine.
