BHP Billiton results fail to impress investors

By Shaun Murison

BHP Billiton results have fallen short of expectations, with the significant share price decline highlighting investor dissatisfaction. 

Revenue at $67.2bn missed estimates of $67.9bn while underlying profit of $13.4bn was marginally short of consensus at $13.6bn. Headline earnings per share increased by 7.5% from the 2013 full year comparative and a final dividend of $0.62 per share has been declared.

Although the results have been met with an initial disfavour, the results are solid against a difficult backdrop of pressured commodity prices over the reporting period. BHP Billiton has been successful in negating these headwinds by improving production capacity to record levels across twelve operations. Lower average prices reduced underlying earnings before interest and tax (EBIT) by $3.2bn in the 2014 financial year, resulting in underlying EBIT declining from the 2013 comparative by 0.31%.

BHP Billiton has confirmed that it will restructure its portfolio of business units by demerging parts of its aluminium, nickel, coal and manganese assets into a new separate listing titled NewCo. NewCo will have a primary listing on the Australian Stock Exchange (ASX), with a secondary listing on the Johannesburg Stock Exchange (JSE). BHP Billiton will remain focused on its core assets in iron ore, copper, petroleum, coal and potash.

This article was originally published IG.com