BHP Billiton attributable profit for year down 37 percent
Staff Writer |
BHP Billiton reported a profit for the year ended 30 June 2018 that declined 37 percent from last year, reflecting massive write-down on its US onshore oil and gas assets, U.S. tax reform and the ongoing fallout from its Brazilian dam collapse.
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But, underlying attributable profit increased 33%, supported by 8% Group copper equivalent volume growth.
"We have announced a record final dividend for shareholders which reflects strong operating performance, solid prices and capital discipline," BHP chief executive Officer Andrew Mackenzie noted in the profit report.
The Board has determined to pay an additional amount of 17 US cents per share or 40.9 billion, taking the final dividend to a record 63.0 US cents per share. This is equivalent to a 69 per cent payout ratio.
In total, dividends of 46.3 billion or 118 US cents per share have been determined for the 2018 financial year, including an additional amount of 41.8 billion above the minimum payout policy.
Attributable profit for the year declined 37 percent to 43.7 billion from last year's 45.9 billion, with earnings per share declining to 69.4 U.S. cents from 110.4 U.S. cents in the prior year.
The latest year included an exceptional loss of 45.2 billion, which related to the impairment of Onshore US assets, US tax reform and the Samarco dam failure. The prior year result included an exceptional loss of 4842 million, in the prior period.
But, profit from continuing operations per ordinary share rose to 124.6 U.S. cents from 119.5 U.S. cents in the prior year.
Underlying attributable profit was 48.9 billion, up 33 percent from 46.7 billion in the prior period.
Profit from operations from continuing operations was 416.0 billion, compared to 412.6 billion in the prior period, has increased as a result of higher prices and an eight per cent increase in Group copper equivalent volumes, partially offset by higher costs.
Revenue from continuing operation for the year increased to 443.64 billion from 436.14 billion last year. Total revenues were up 20% to 445.81 billion.
Productivity gains of about 41 billion is now expected for the 2019 financial year, with strong momentum to be carried into the 2020 financial year.
Capital and exploration expenditure guidance is unchanged at below 48 billion per annum for the 2019 and 2020 financial years, subject to exchange rate movements.
The company noted that restart of Samarco's operations remains a focus but is subject to separate negotiations with relevant parties and will occur only if it is safe, economically viable and has the support of the community. Resuming operations requires the granting of licences by state and federal authorities, community hearings and an appropriate restructure of Samarco's debt.
The company reported group copper equivalent production growth of eight per cent in the 2018 financial year, with record production at WAIO, Queensland Coal and Spence.
Group copper equivalent production for the 2019 financial year is expected to be broadly in line with the 2018 financial year, despite the impacts from higher strip ratios at Queensland Coal and New South Wales Energy Coal (NSWEC), lower copper grades at Escondida and Spence and natural field decline at Conventional Petroleum.
The company noted that it will maintain a strong balance sheet through the commodity price cycle, with net debt in the target range of 410 to 415 billion. It expects net debt to remain at the lower end of the target range while commodity prices are strong.
Copper production for the 2018 financial year increased by 32 per cent to 1,753 kt largely due to a full year of production at Escondida following the industrial action in the previous year, supported by the ramp-up of the Los Colorados Extension (LCE) project and record
roduction at Spence. This more than offset reduced volumes at
Olympic Dam as a result of the planned smelter maintenance campaign.
Iron ore production for the 2018 financial year increased by three per cent to a record 238 Mt as a result of improved productivity and stability across the supply chain, and production records at Jimblebar and Mining Area C.
On 27 July 2018 BHP announced that it had entered into agreements for the sale of its entire interests in its Eagle Ford, Haynesville, Permian and Fayetteville Onshore US oil and gas assets for a combined base consideration of 410.8 billion, payable in cash. ■