BHP Limited earnings results

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20 February 2019

Results (US$m)

Half Year 2019

Half Year 2018

Change

Net Profit after Tax (NPAT) 

3,764

2,015

+87%

Underlying Profit

4,032

4,399

-8%

Bloomberg Consensus 

4,374

 

 

Revenue 

20,742

20,526

+1%

Underlying EBIT 

7,483

7,331

+2%

Underlying EBITDA 

10,539

10,836

-3%

Interim Dividend ($)

0.55

0.55

unch

BHP Ltd (BHP) first half earnings slightly below analyst forecasts  

 

Results

  • BHP reported a first half net profit of US$3.7 billion, an increase of 87% reflecting the writedowns in the previous corresponding period (pcp) which related to US tax reform and the Samarco dam failure. The underlying results, which removes the impact of one-off events, saw underlying profit fall 8% to US$4.03 billion.  

Drivers

  • BHP saw higher average realised prices for petroleum and metallurgical coal over the period, although these increase were offset by lower average realised prices for thermal coal, copper and iron ore. 
  • Costs for the period were higher than the guidance provided for the full year. The increase in costs was a result of planned maintenance and production outages including; an acid plant outage in August 2018 at Olympic dam, West Australian Iron Ore (WAIO) train derailment in November 2018, a fire at the electro-winning plant in September 2018 at Spence and a fire at the Kalgoorlie smelter in September 2018 impacting Nickel West. These events were balanced by the build-up of inventory levels during the outages and increased volumes elsewhere.
  • The Onshore US sales process was completed on 31 October 2018, which paved the way for $10.4 billion being returned to shareholders. This took place through an off-market buy-back of US$5.2 billion in December 2018 and a special dividend - US$1.02 per share in January 2019, representing the balance of US$5.2 billion of the net proceeds from the transaction.

Dividend

  • On 17 December 2018, BHP determined to pay a special dividend of US$1.02 per share (US$5.2 billion), which was paid on 30 January 2019 related to the disbursement of proceeds from the disposal of Onshore US.

Outlook

  • BHP has maintained its unit cost and production guidance for the full year with unit costs across our business forecast to improve in the second half of the year.

Share price

  • BHP shares have climbed 2% on the back of its half year results. Year-to-Date BHP shares have jumped 10%, extending last year’s 15% improvement.

Tags:

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