BHP Billiton H1 Profit Nearly Halves On Commodity Prices; Boosts Dividend

(RTTNews) - World's largest miner BHP Billiton Group (BHP, BLT.L, BHP.AX, BBL, BHPBF.PK), comprising of BHP Billiton Ltd. and BHP Billiton Plc, reported Tuesday a profit for the first half ended December 31, 2014 that nearly halved from last year, despite production growth, hurt by the volatile commodity market. 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 $4.27 billion or $0.80 per share for the first half, 47.4 percent lower than $8.11 billion or $1.52 per share in the same period last year.

Excluding exceptional items, underlying attributable profit for the first-half was $5.35 billion or $1.01 per basic share, compare to $7.76 billion or $1.46 per basic share in the prior-year period.

Pre-tax profit was $8.59 billion for the period, down from $12.41 billion last year.

Underlying EBIT declined 25.5 percent to to $9.23 billion, with a margin of 32 percent, from the comparable period last year.

Profit from operations (EBIT) for the period decreased 31.8 percent to $8.82 billion from $12.93 billion in the prior-year period.

BHP Billiton's revenues for the first half declined 11.9 percent to $29.90 billion from $33.95 billion in the same period last year. Revenue from group production was $28.87 billion, lower than $32.21 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 percent 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 percent at Western Australia Iron Ore, 15 percent at Queensland Coal, 13 percent at Escondida and 8 percent 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 $2.4 billion achieved in the first half. It remains on track to deliver at least $4.0 billion of productivity gains from the core portfolio by the end of the 2017 financial year.

BHP reduced capital and exploration expenditure by 23 percent to $6.4 billion in the first half and plans to invest a total of $12.6 billion in the 2015 financial year, 15 percent 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 $10.8 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 $13.5 billion.

Looking ahead, BHP Billiton said the proposed demerger will allow it to continue the process of building an organization that will be truly unique in its sector, and one that is well positioned for success in the face of ever increasing commodity volatility.

BHP closed Monday's regular trading session at $49.55, down $0.93 or 1.84% on a volume of 2.51 million shares. However, the shares gained $1.69 or 3.41% in after-hours trading.

In Tuesday's regular trading session on the Australian Securities Exchange, BHP.AX is trading at A$33.01, up $0.89 or 2.77% on a volume of 5.43 million shares.