South32 expects to ride on improving prospects for its range of commodities as the miner looks to continue its strong earnings growth.
A recovery in some commodity prices swung the miner to a $US1.23 billion ($A1.6 billion) net profit in the year to June 30, from a $US1.6 billion loss a year ago.
Underlying earnings surged eight-fold to $US1.15 billion, while revenue was up 20 per cent.
South32 said higher average realised prices for its commodities, mainly metallurgical coal and manganese, boosted earnings by $US1.89 billion.
Chief executive Graham Kerr said prices for those two commodities could ease in the second half of calendar 2017 but many of the company's other commodities were not trading at "unreasonably high" levels.
"If you think about commodity prices, some of our largest exposures like aluminium and alumina - most of the market would see that as heading north, not south. So, there is some positivity around that," he said.
"Part of the value proposition we have is a diversified offering of commodities."
South32, which was spun off from BHP Billiton in 2015, is the world's largest producer of manganese ore, and also operates significant assets in the coal, nickel, alumina, silver, zinc and lead sectors.
Its earnings growth has come despite lower volumes, with the miner missing production guidance for several commodities in 2016/17, due to bad weather and maintenance.
The company managed to reduce costs by $US360 million during the year.
Free cash flow more than tripled in the year, and South32 has boosted funds for share buybacks by $US250 million to $US750 million.
Dividends have also increased, with a full-year payout of 10 cents a share up from one cent in the prior year.
South32's decision to increase the payout ratio to 50 per cent of underlying earnings was temporary, given the strong cash flow and franking credits, and the company will stick to its original ratio of 40 per cent in the future, Mr Kerr said.
Shares in the company were up 6.5 cents, or 2.3 per cent, at $2.955 at 1505 AEST, and have risen 45 per cent over the past 12 months.
COMMODITY PRICES PUSH SOUTH32 TO PROFIT:
* Full year net profit of $US1.23b vs $US1.6b loss
* Revenue up 20pct to $US6.95b
* Final dividend up 5.4 US cents to 6.4 US cents
Share
