The company said pro-forma net profit for the 12 months to the end of June fell to $28m from $64m the previous year mainly due to impairment charges against its coal and manganese operations.
Underlying profit rose to $575m from $407m, largely because of a fall in the value of the Australian dollar.
The group outlined plans to reduce so-called sustaining capital expenditure by nine per cent to $650m during 2016, and a longer-term to plan to reduce controllable costs by a minimum of $350m a year by the end of 2018.
The company said it is reviewing its South African manganese division which may lead to further cuts in alloy and ore production.
Shares in South32 fell yesterday on another difficult day for commodities amid a global stocks rout triggered by China. The Sydney-listed shares dropped 7.57 per cent to AUD$1.40 and were down 10.2 percent to 63.75p in London.
Jefferies International cut its rating on the company to hold from buy, and lowered its target price to 85p from 145p.
South32 was demerged from BHP Billiton in May and its portfolio of commodities includes aluminium, manganese, coal and a silver mine.