On 17 October, BHP Billiton (ASX: BHP) announced that it has delivered a 2 percent rise in copper equivalent production despite maintenance at a number of operations. The company is on track to meet guidance for the FY 2019 across all commodities except copper where the company has reduced production by 3 percent due to the outages at Olympic Dam in Australia and Spence in Chile. Following this news, the share price of the company decreased by 0.708 percent as on 17 October 2018.
The company was having five major projects under development at the end of September quarter 2018. The combined budget of all the five projects is US$10.6 billion. In September quarter, the total copper production was broadly flat at 409 kt and the guidance for the 2019 financial year has been reduced to between 1,620 and 1,705 kt. The guidance was reduced mainly due to lower volumes of production at Spence and Olympic Dam.
In September 2018, a fire occurred at the electro-winning plant due to which the production was stopped and resulted to lower production volumes at Spence. The Production guidance for Spence has been reduced from between 185 and 200 kt to between 160 kt and 175 kt for FY19.
As a result of an unplanned acid plant outage in August 2018, the Olympic Dam copper production decreased by 21% to 33 kt. The Surface operations are currently paused as remediation works continue on the gas converter, Sulphur burner and waste heat boiler in the acid plant. It is expected that the Surface operations will be resumed at the end of October 2018 and will run to its full capacity during November 2018. Due to these reasons, the production guidance for the 2019 financial year has been reduced from between 200 and 220 kt to between 170 and 180 kt.
For the September quarter, the petroleum exploration expenditure was US$133 million, of which US$55 million was expensed. The total iron ore production increased by 10% to 61 Mt or 69 Mt on a 100 percent basis and there is no change in the guidance of iron ore production for the FY 2019.
In FY18, the total revenue of the BHP increased from $36,135 million in FY17 to $43,638 million. The profit from operations of the company increased from $12,554 million in FY17 to $15,996 million in FY18. The loss after tax from discontinued operations increased from $472 million in FY17 to $2,921 million in FY18. The net cash flow from operating activities increased from $16,804 million in FY17 to $18,461 million in FY18, which reflects higher commodity prices and a strong operating performance during the year. In FY18, the company announced the highest ever final dividend of 63 cents per share and returned $6.3 billion to its shareholders in the form of dividends.
In the past six months, the share price of the company increased by 13.08 percent as on 16 October 2018. BHP’s shares traded at $33.660 with a market capitalization of $108.88 billion as on 17 October 2018 (AEST 4:00 PM).
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