BHP confirms coal exits as profits underwhelm

BHP confirms coal exits as profits underwhelm
BHP has flagged a potential demerger of coking coal and thermal coal assets as its full year profits and dividends fell short of analyst expectations.BHP reported a $US9.06 billion underlying profit, which was below the $US9.418 billion underlying profit expected by analyst consensus compiled by VUMA.Total dividends for the year of $US1.20 were also weaker…

BHP has flagged a skill demerger of coking coal and thermal coal sources as its paunchy year profits and dividends fell making an try analyst expectations.

BHP reported a $US9.06 billion underlying earnings, which used to be below the $US9.418 billion underlying earnings expected by analyst consensus compiled by VUMA.

Total dividends for the year of $US1.20 own been also weaker than the $US1.23 expected by analysts, after the miner announced a US55¢ closing dividend.

While weaker than expected and weaker than final year, the earnings and dividends own been stable by historical standards, with the total dividend payout better than three of the previous four years,

The used to be constructed upon excessive iron ore prices, with BHP accelerating sales within the three months to June 30 when prices pushed above $US100 per tonne.

After years of hinting that it did no longer are searching for to proceed mining thermal coal, BHP confirmed on Tuesday it could perhaps well perchance label to exit its Mt Arthur mine in NSW and its 33 per cent stake within the Cerrejon mine in Colombia.

BHP has flagged a skill demerger of coking coal and thermal coal sources as its paunchy year profits and dividends fell making an try analyst expectations.

BHP reported a $US9.06 billion underlying earnings, which used to be below the $US9.418 billion underlying earnings expected by analyst consensus compiled by VUMA.

Total dividends for the year of $US1.20 own been also weaker than the $US1.23 expected by analysts, after the miner announced a US55¢ closing dividend.

While weaker than expected and weaker than final year, the earnings and dividends own been stable by historical standards, with the total dividend payout better than three of the previous four years,

View Also:  Business urges Andrews to open faster

The used to be constructed upon excessive iron ore prices, with BHP accelerating sales within the three months to June 30 when prices pushed above $US100 per tonne.

After years of hinting that it did no longer are searching for to proceed mining thermal coal, BHP confirmed on Tuesday it could perhaps well perchance label to exit its Mt Arthur mine in NSW and its 33 per cent stake within the Cerrejon mine in Colombia.

Less expected used to be Tuesday's declaration that BHP also desired to exit its decrease quality coking coal mines in Queensland, which are owned under the BHP Mitsui Coal joint project.

BHP owns 80 per cent of the joint project with Mitsui and said it believed steelmakers would more and more snatch the create of top quality, laborious coking coal that the firm mines in Queensland through its different joint project with Mitsubishi.

That preference would make existence more durable in future for the decrease quality coking coal extracted from BHP and Mitsui mines like South Walker Creek and Poitrel.

''Given our level of interest on laborious coking coal, these sources would better compete for capital open air of BHP,'' said the firm on Tuesday, repeating the argument it feeble when demerging a swathe of sources into South32 in 2015.

The BHP Mitsui coking coal mines could perchance well be the sacrificial lamb required for BHP to demerge its thermal coal sources, after unofficial efforts to sell the thermal coal mines over the last year fell flat amid extremely outdated thermal coal prices.

The thermal coal sources would be loss making and conflict if demerged as an fair firm this present day, but a more financially noteworthy firm would emerge if the thermal coal mines own been mixed with the BHP Mitsui coking coal sources.

View Also:  Huawei data centre built to spy on PNG

''We are in a position to discover the maximise the associated price of these sources, including by a demerger of an fair, listed firm and commerce sale opportunities,'' said BHP on Tuesday.

Commercial

Hydrogen has been touted as a probable change for coking coal within the manufacturing of steel, but in veiled feedback, BHP rejected the notion that such substitution can also happen at this time.

''We imagine that a wholesale shift a ways flung from blast furnace steel making, which relies on metallurgical (coking) coal, is mute decades in due route,'' said the firm on Tuesday.

BHP said it could perhaps well perchance also watch to divest aged oil and gas sources.

Ahead of the coronavirus outbreak, in actual fact one of many perfect choices looming on Mr Henry's agenda used to be whether to approve construction of the Jansen potash mine in Canada at a impress of between $US5.3 billion and $US5.7 billion.

An approval decision used to be scheduled to discover popularity in February 2021, but BHP pushed that schedule out by six months on Tuesday, saying the pandemic and shaft lining factors had forced the prolong and would seemingly push up the associated price of the shaft lining.

BHP has retained the $US5.3 billion to $US5.7 billion label on Jansen, despite approving $US345 million of early works spending in October 2019 which used to be alleged to make a construction decision simpler.

Next

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like
Afterpay CFO’s sky-high value defence
Read More

Afterpay CFO’s sky-high value defence

One of the best ways to understand the unprecedented split between the valuation metrics applied to traditional companies and those applied to technology companies is through the lens of buy now, pay later market darling, Afterpay.Its chief financial officer Luke Bortoli, who is handing over to a new CFO Rebecca Lowde on October 6, tells…
Victoria’s epic battle to keep supply chains open
Read More

Victoria’s epic battle to keep supply chains open

Jason Bush started getting text messages a week ago that "bad things might happen" in Victoria as the state's COVID-19 crisis escalated.Mr Bush, a Toll Group executive general manager who oversees 14 warehouses for healthcare, retail and consumer goods companies, held talks with his team on how they would manage if Victoria went beyond stage…