24th Feb 2015 06:24
MELBOURNE (Alliance News) - World's largest miner BHP Billiton Group, comprising of BHP Billiton Ltd and BHP Billiton PLC, on Tuesday said its first half profit nearly halved year-on-year, despite growth in production, owing to the impact of volatile commodity markets. Further, the company slashed capital and exploration expenditure, as well as declared a five percent increase in interim dividend.
The Melbourne, Australia-based mining giant reported attributable profit of USD4.27 billion or USD0.80 per share for the first half, 47.4% lower than USD8.11 billion or USD1.52 per share in the same period last year.
Excluding exceptional items, underlying attributable profit for the first-half was USD5.35 billion or USD1.01 per basic share, compare to USD7.76 billion or USD1.46 per basic share in the prior-year period.
Pre-tax profit was USD8.59 billion for the period, down from USD12.41 billion last year.
Underlying EBIT declined 25.5% to to USD9.23 billion, with a margin of 32%, from the comparable period last year.
Profit from operations (EBIT) for the period decreased 31.8% to USD8.82 billion from USD12.93 billion in the prior-year period.
BHP Billiton's revenues for the first half declined 11.9% to USD29.90 billion from USD33.95 billion in the same period last year. Revenue from group production was USD28.87 billion, lower than USD32.21 billion recorded in the previous year.
However, group production for the first half improved nine percent, with records achieved for eight operations and five commodities, amid a ramp up of major projects. The company said it remains on track to deliver group production growth of 16% over the two years to the end of the 2015 financial year.
The company noted that its cost competitiveness continues to improve across all its major businesses, with unit cash costs reducing 29% at Western Australia Iron Ore, 15% at Queensland Coal, 13% at Escondida and 8% at Onshore US.
The company declared a five percent higher interim dividend for the first half of 62.0 cents per share fully franked, payable on March 31, 2015 to shareholders of record as of March 13, 2015.
The company said it is extending its productivity gains faster than initially anticipated with USD2.4 billion achieved in the first half. It remains on track to deliver at least USD4.0 billion of productivity gains from the core portfolio by the end of the 2017 financial year.
BHP reduced capital and exploration expenditure by 23% to USD6.4 billion in the first half and plans to invest a total of USD12.6 billion in the 2015 financial year, 15% lower than the original guidance amid the continued improvement in the group's capital productivity. It also projects a lower capital and exploration expenditure of USD10.8 billion in the 2016 financial year.
BHP Billiton announced on December 8, 2014 the plan for a proposed demerger that will create a new company called South32. A final Board decision on the proposed demerger will be made once all necessary third party approvals are secured on satisfactory terms. The proposed demerger remains on track to be completed in the first half of the 2015 calendar year.
At the end of the December 2014 half year, BHP Billiton said it had seven major projects under development with a combined budget of USD13.5 billion.
Looking ahead, BHP Billiton said the proposed demerger will allow it to continue the process of building an organisation that will be truly unique in its sector, and one that is well positioned for success in the face of ever increasing commodity volatility.
Copyright RTT News/dpa-AFX
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