BHP Profit Jumps, Dividend Steady
19 February 2019 - 5:12PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Group Ltd. (BHP.AU) reported an 87% rise in
first-half net profit and kept its midyear payout unchanged as the
company generates solid cash flow from its mines and oil
fields.
BHP, the world's largest listed miner by market value, said it
made a profit of US$3.76 billion in the six months through
December. Net profit in the year-earlier period was US$2.02
billion, weighed down by one-off items totaling US$2 billion mainly
because of large expenses linked to the U.S. tax overhaul.
Underlying profit from continuing operations was down 8% at
US$4.03 billion, below the US$4.21 billion median of eight analyst
forecasts compiled by The Wall Street Journal. During the period,
BHP sold most of its U.S. onshore shale division to BP PLC (BP.LN)
in a more-than US$10-billion deal.
The company kept its interim dividend unchanged at US$0.55 a
share. It had paid a US$1.02 special dividend to shareholders late
last month funded from the sale of the shale operations.
Earnings were aided by stronger petroleum markets. BHP's average
price for oil was up 29%, while natural gas increased by 12% and
liquefied natural gas by 36%.
BHP is different from global miners because of its large
oil-and-gas division, which typically accounts for one-fifth of
earnings.
BHP faced some operational setbacks in other divisions during
the half. The miner recorded a productivity hit totaling US$460
million because of disruptions to operations that included a train
derailment in a remote part of Australia. BHP had also reported an
acid-plant outage at its Olympic Dam copper mine in Australia and a
plant fire at its Spence mine in Chile.
The company said unplanned outages meant it now expected
productivity to be broadly flat in the current fiscal year.
"A strong second half is expected to partially offset the
impacts from operational outages in the first half, with unit costs
across our business forecast to improve," Chief Executive Andrew
Mackenzie said.
BHP last month reported mixed first-half production of its main
commodities. It produced 2% more iron ore on a year earlier. That
commodity accounts for roughly two in every five dollars it
earns.
The price it sold iron ore for during the period fell, however,
by 2%. Underlying earnings before interest, tax, depreciation and
amortization from that division rose by US$34 million to US$4.3
billion, the miner said.
Output of steelmaking coal was also slightly higher, although
BHP produced less energy coal and petroleum on the year-earlier
period.
BHP also produced less copper. The miner's copper division
meantime grappled with weakening prices, which fell by 18% on the
year-earlier period. Underlying earnings from that division fell
roughly 40% year-on-year, the miner said.
Still, the company said it cut net debt by US$1 billion since
mid-2018, to US$9.89 billion.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 19, 2019 00:57 ET (05:57 GMT)
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