BHP posts record US$22b profit in H2
Source: Agencies |
August 25, 2011, Thursday
|
Print Edition
Print Edition
BHP Billiton delivered a record second-half profit yesterday, driven by soaring prices for iron ore, allowing it to award a dividend hike on top of its hefty expansion plans.
The world's biggest miner nevertheless joined its peers in sounding a warning over escalating costs and disappointed some investors by deciding against a share buyback after the result, which also produced Australia's largest ever corporate annual profit of US$21.7 billion and US$30.1 billion of operating cashflow.
"It's a very solid and commendable result but it's not enough in terms of the surprise factor to catapult people to go and buy the stock on the back of it," said Tim Schroeders, portfolio manager at Pengana Capital.
Investors had been divided over whether to expect another buyback following BHP's recent US$12.1 billion bid for United States shale gas producer Petrohawk Energy, its biggest successful deal since BHP took over Billiton Plc.
"We weren't expecting any capital management initiatives just now, given the Petrohawk acquisition, but with their cash generation, low debt level and commodities boom, we will focus on it in the next 12 months," said Rohan Walsh, investment manager at Karara Capital.
BHP said it prioritized operational growth, maintaining balance sheet strength, growing its dividend and only then did the focus shift to returning surplus cash through buybacks.
"We see buybacks really as the deployment of surplus capital after those other priorities have been completed," CEO Marius Kloppers said.
BHP, the last of the major miners to report results, was cautious on the near-term outlook for commodity prices, expecting weak growth in Europe and the US.
But it continued to see a strong outlook longer term due to rapidly growing developing countries.
"This coupled with shortages of labor and equipment on the supply side, which continue to constrain the industry's ability to bring on new production, gives us a favorable outlook," Kloppers told reporters.
Rival miners, including Rio Tinto and Anglo American, have warned of rising operating and capital costs.
The world's biggest miner nevertheless joined its peers in sounding a warning over escalating costs and disappointed some investors by deciding against a share buyback after the result, which also produced Australia's largest ever corporate annual profit of US$21.7 billion and US$30.1 billion of operating cashflow.
"It's a very solid and commendable result but it's not enough in terms of the surprise factor to catapult people to go and buy the stock on the back of it," said Tim Schroeders, portfolio manager at Pengana Capital.
Investors had been divided over whether to expect another buyback following BHP's recent US$12.1 billion bid for United States shale gas producer Petrohawk Energy, its biggest successful deal since BHP took over Billiton Plc.
"We weren't expecting any capital management initiatives just now, given the Petrohawk acquisition, but with their cash generation, low debt level and commodities boom, we will focus on it in the next 12 months," said Rohan Walsh, investment manager at Karara Capital.
BHP said it prioritized operational growth, maintaining balance sheet strength, growing its dividend and only then did the focus shift to returning surplus cash through buybacks.
"We see buybacks really as the deployment of surplus capital after those other priorities have been completed," CEO Marius Kloppers said.
BHP, the last of the major miners to report results, was cautious on the near-term outlook for commodity prices, expecting weak growth in Europe and the US.
But it continued to see a strong outlook longer term due to rapidly growing developing countries.
"This coupled with shortages of labor and equipment on the supply side, which continue to constrain the industry's ability to bring on new production, gives us a favorable outlook," Kloppers told reporters.
Rival miners, including Rio Tinto and Anglo American, have warned of rising operating and capital costs.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
