(Reuters) - Australian-based miner South32 Ltd <S32.AX> posted an eight-fold rise in its annual underlying earnings on Thursday, as a broad recovery in metal prices offset disruptions to its coal business.
Fiscal 2017 underlying earnings jumped to $1.15 billion from $138 million the previous year, just below analysts expectations of around $1.18 billion.
South32 also said it would extend a $500 million buyback by a further $250 million, while boosting its final dividend to 6.4 cents per share from 1 cent per share, helping push up its shares by nearly 4 percent in early trade.
"The combination of our high operating leverage and stronger commodity prices delivered a substantial increase in financial performance," Chief Executive Graham Kerr said in a statement.
South32 was formed in 2015 and produces nickel, coal, manganese, alumina, silver and other metals from businesses previously owned by BHP Billiton <BHP.AX>. Its Cannington mine in Australia is one of the world's largest sources of silver and also yields zinc and lead.
The App in coal mine in Australia, where work has been suspended multiple times due to challenging ground conditions and elevated gas levels, was ramping up long wall operations for a September restart, South32 said.
The company had spent $211 million by June 30 purchasing shares at an average price of A$2.66 per share after it kicked off the buyback in April.
Reported net profit came in at $1.2 billion, compared with a net loss of $1.6 billion last year, weighed down by $1.7 billion in impairments.
(Reporting by Anusha Ravindranath in Bengaluru; Editing by James Regan and Richard Pullin)
