25th Aug 2015 06:59
LONDON (Alliance News) - BHP Billiton PLC Tuesday said its profit and earnings both plummeted in its recent financial year due to falling commodity prices, but the miner surprised the market by improving its dividend.
The FTSE 100-listed multi-commodity giant also reported large reductions in costs as it tries to battle the downturn in the mining industry, including reducing its capital expenditure budget by a further USD500 million in the 2016 financial year.
The miner reported a pretax profit of USD8.05 billion in the year ended June 30, a huge fall from the USD21.73 billion profit made a year earlier, as revenue dropped to USD43.45 billion from USD55.04 billion.
Earnings before interest, tax, depreciation, amortisation and exceptional items fell almost a third to USD21.85 billion from USD30.29 billion as Ebit before items almost halved to USD11.86 billion from USD22.09 billion.
Profit and earnings were hampered by lower commodity prices and by exceptional items which totalled USD3.19 billion, comprised of USD2.78 billion related to its onshore US business and USD409 million for its nickel assets.
Net operating cashflow fell by a quarter to USD17.79 billion from USD23.64 billion.
The mining major surprisingly increased its dividend for the full year to 124.0 cents per share from 122.0 cents last year. Analysts were expecting the dividend to remain flat year-on-year.
BHP said it delivered USD4.10 billion of productivity gains in the year, "two years ahead of target", and the company said it expects to book more cost reductions in the current financial year.
Alongside those cost reductions, BHP's capital expenditure fell by a quarter year-on-year to USD11.0 billion in the period, and this will fall to USD8.50 billion in the 2016 financial year from its previous guidance of USD9.0 billion, and to USD7.0 billion in the following year. Analysts were expecting capital expenditure in 2016 to fall to around USD8.0 billion.
At the end of June, BHP reported a net debt of USD24.40 billion, which was down from USD25.80 billion at the end of December.
"The success of our productivity initiatives generated strong cashflow which supported our dividend commitment, funded continued investment in growth and enabled a reduction in net debt, despite the dramatic fall in commodity prices," said Chief Executive Andrew Mackenzie. "We will cut costs further and exercise our growing capital flexibility to improve our competitiveness and support our progressive dividend policy through the cycle."
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
BHP Billiton PLC