Broken Hill Proprietary Co. Ltd. 1994/95 Half Year Report.SAN FRANCISCO--(BUSINESS WIRE)--Dec. 16, 1994--Broken Hill Proprietary Co. Ltd. 1994/95 Half Year Report:
-0-
Highlights
-- Record half year profit of Dollar 1 070 million including
abnormal items (Dollar 836 million excluding abnormal items).
-- Record half year profits for Minerals and Steel.
-- Earnings per share of 76.7 cents including abnormal items
(59.9 cents per share excluding abnormal items).
Half year ended
---------------
30 November
-----------
Results Summary 1994 1993 Change
--------------- ---- ---- ------
Operating revenue (Dollar million) 9 214 8 343 +10.4%
Operating profit (Dollar million)
- Including abnormal items 1 070 640 +67.2%
- Excluding abnormal items 836 640 +30.6%
Basic earnings per share (cents)
- Including abnormal items 76.7 47.9 +60.1%
- Excluding abnormal items 59.9 47.9 +25.1%
Directors today announced an operating profit after income tax
attributable to BHP shareholders of Dollar 1,070 million for the half
year ended 30 November 1994. The profit represents an increase when
compared to the 1993 result of 67.2% including abnormals and 30.6% if
abnormals are excluded.
The 1994 result includes an abnormal profit of Dollar 234
million arising from the sale of the Group's investment in Woodside
Petroleum Ltd; there were no abnormal items in the 1993 result.
Operating profit after income tax excluding abnormal items
attributable to BHP shareholders was Dollar 836 million; an increase
of Dollar 196 million over the 1993 result of Dollar 640 million.
Basic earnings per share for the half year are 76.7 cents
including abnormals and 59.9 cents excluding abnormals; the 1993
comparative earnings per share were 47.9 cents.
A half yearly dividend of 24.0 cents per share, being an
increase of 14.3% on the previous November half year dividend, was
declared and paid during the half year.
Consolidated Group Results
Group sales and other revenues of Dollar 9,214 million increased
by Dollar 871 million or 10.4% compared with the previous
corresponding half year. The major factors affecting revenues were:
-0-
-- in Minerals, higher copper prices, increased shipments of
copper from Escondida (Chile) and iron ore (Australia) and the
consolidation of Ok Tedi Mining Limited (Papua New Guinea) for
six months compared to two months in 1993. These factors were
partly offset by lower US Dollar prices for coal, iron ore and
manganese;
-- in Steel, increased domestic and export despatches from
Australian operations;
-- in Petroleum, sales revenue was lower due to the impact of
lower world oil prices, partly offset by increased volumes.
Other revenue increased due mainly to the sale of the Group's
investment in Woodside Petroleum Ltd;
-- in Service Companies, general expansion in most business areas;
and
-- the higher average A Dollar / US Dollar exchange rate had the
effect of decreasing US Dollar denominated sales when stated
in Australian dollars (the average A Dollar / US Dollar hedge
settlement rate was US Dollar 0.74 for the half year ended 30
November 1994 compared with US Dollar 0.67 for the half year
ended 30 November 1993).
-0-
Depreciation and amortisation charges increased by Dollar 86
million to Dollar 771 million. The charge for Petroleum was higher
reflecting increased production from the Bruce field (UK), the North
West Shelf (Australia) and the commissioning of the Griffin
(Australia) and Dai Hung (Vietnam) developments; these were partly
offset by lower Timor Sea, Bass Strait (Australia) and Kutubu (PNG)
production and the impact of reserve revisions. Minerals charge
increased due to the full six months consolidation of Ok Tedi, the
commissioning of new plant at Escondida and Kalimantan (Indonesia),
and accelerated depreciation on certain assets at Mt Newman. Steel's
charge increased as a result of a reassessment of certain asset
lives.
Interest expense at Dollar 182 million was 22.9% lower than for
the comparable period last year as a result of lower average debt
levels, the effect of the higher A Dollar / US Dollar exchange rate
on US dollar interest charges, and an increase in interest
capitalised.
Compared with 1993, tax expense excluding abnormal items was
Dollar 92 million higher reflecting the increase in pre-tax profits.
Income tax expense attributable to operating profit excluding
abnormal items was Dollar 469 million and represented an effective
tax rate of 32.6%. This was lower than the nominal Australian tax
rate of 33% due mainly to allowances for development, investment and
research, as well as rebateable dividends and lower foreign taxes due
to adjustment to prior year provisions and favourable currency
movements. Offsetting these effects were non-deductible accounting
depreciation and amortisation, non-deductible exploration expenditure
and higher taxes on some non-Australian income.
-0-
Business Group Results (after income tax)
Half year ended 30 November
---------------------------
Including abnormals Excluding abnormals
------------------- -------------------
1994 1993 Change 1994 1993 Change
---- ---- ------ ---- ---- ------
Dollar Dollar Dollar Dollar
Million Million % Million Million %
------- ------- - ------- ------- -
Minerals 486 260 +86.9 486 260 +86.9
Steel 344 288 +19.4 344 288 +19.4
Petroleum 496 261 +90.0 262 261 +0.4
Service
Companies 62 77 -19.5 62 77 -19.5
Net unallocated
interest (100) (129) (100) (129)
Corporate and
unallocated items (84) (41) (84) (41)
------- ------- ------- -------
Operating profit
before outside
equity interests 1 204 716 +68.2 970 716 +35.5
Outside equity
interests (134) (76) (134) (76)
------- ------- ------- -------
Operating profit
attributable to
members of the
BHP Entity 1 070 640 +67.2 836 640 +30.6
======= ======= ======= =======
Minerals
The Minerals Group's profit for the half year was a record of
Dollar 486 million, an increase of 86.9% above the same period last
year. The result for the November quarter was also a record, and is
the fourth consecutive quarterly record.
Significantly higher copper prices had a favourable impact on the
result. During the half year copper traded on the London Metal
Exchange at an average of US Dollar 1.14 per pound, reaching a four
year high of US Dollar 1.35. For the same period last year the
average price was US Dollar 0.82 per pound with prices ranging
between US Dollar 0.72 and US Dollar 0.91. The consolidation of Ok
Tedi for the six months (compared to two months in the same period
last year) and the devaluation and subsequent floating of the Kina
also benefited results.
Strong customer demand for Minerals products continued during the
half year, with most operations producing at capacity. Record half
year shipment levels were achieved for iron ore following the
start-up of Yarrie (Western Australia) and increased demand for Yandi
ore (Western Australia). Escondida also had higher shipment levels
compared to the same period last year following the mine/mill
expansion.
The result was achieved despite lower commodity prices for coal,
iron ore and manganese and a higher depreciation charge following the
commissioning of new plant.
Evaluation of the Northwest Territories (Canada) diamonds
prospect continues to be encouraging. Bulk samples have been taken
from three kimberlite pipes and a feasibility study into development
is being prepared. The project has been submitted for formal
environmental approval.
Other significant events for the half year included:
-0-
-- the first production of coal from the Crinum underground mine
in Queensland;
-- the first cathode copper production at the Escondida Leach
Plant; and
-- the final go-ahead for the development of the Hartley platinum
project in Zimbabwe.
-0-
Steel
Steel Group's profit for the half year of Dollar 344 million was
a record and represents an increase of Dollar 56 million compared to
the same period last year. The improved result was due to the
continuing recovery in the Australian domestic market, lower unit
costs resulting from higher levels of production from Australian
operations and increased export despatches.
Australian domestic steel despatches increased, reaching 2.280
million tonnes, with volumes for the November quarter increasing 3%
over the August quarter. Half year domestic despatches were 14%
above last year. Export steel despatches of 1.392 million tonnes
were 10% higher than for the corresponding period last year with
total despatches of 3.672 million tonnes achieving a record level
from Australian operations.
Record half yearly raw steel production of 4.322 million tonnes
was 6% higher than for the previous corresponding November half year
due to increased output from the three integrated Australian
steelworks. This was partly offset by lower production from New
Zealand Steel and the Sydney Steel Mill.
All the Australian manufacturing Divisions improved their profit
performance. However lower results from BHP New Zealand Steel
following extensive kiln and melter repairs and the recommissioning
of a metal coating line had an unfavourable effect on profit. In
addition, lower coal production resulting from longwall changeouts
and a longwall face collapse at Elouera Colliery, reduced the
contribution from the Collieries Division.
Other significant events for the half year included:
-0-
-- commissioning of the Indonesian paint line facilities;
-- announcement of a 50:50 joint venture with North Star Steel
(Cargill) to construct and operate a 1.5 million tonnes per
annum compact flat products steel plant in the mid-west of the
United States;
-- approval of a new ZINCALUME? coating line to be located at
Rancho Cucamonga, California, USA and ZINCALUME coating and
paint lines in Selangor, Malaysia;
-- announcement of two new roll-forming plants to be located in
China;
and within Australia:
-- commissioning of rolling mill facilities for bar production at
the Sydney Steel Mill;
-- approval to modernise Port Kembla Steelworks Tinplate
manufacturing facilities; and
-- approval to upgrade Whyalla Steelworks Structural Mill to
improve mill productivity and throughput.
-0-
Petroleum
Petroleum's profit for the November 1994 half year was Dollar
496 million and included an abnormal profit of Dollar 234 million
realised on the disposal of BHP's remaining investment in Woodside
Petroleum Ltd. Profit prior to abnormals was Dollar 262 million, in
line with the corresponding period last year.
The profit result before abnormals reflects an improved
contribution from the Group's Hawaiian operations and increased sales
volumes for all products. These gains were offset by the impact of
the higher A Dollar/ US Dollar exchange rate, lower realised US
Dollar oil prices and increased exploration expense.
Higher oil and condensate production from Griffin, North West
Shelf (Australia) and Bruce (UK), and the commencement of production
from Dai Hung (Vietnam) in October 1994, more than offset declines in
Bass Strait and the Timor Sea in Australia and from Kutubu (PNG).
Natural gas production was higher than for the same period last year
as a result of the commencement of production from the Johnston field
in the UK sector of the North Sea, block K4b/5a in the Netherlands
and the Griffin field in Australia.
Major project development work continues in the UK (Liverpool
Bay) and Australia (Goodwyn A, Cossack/Wanaea, Bream B and West
Tuna). The first of these projects to come on line will be Goodwyn
A, with gas production now scheduled for early in the 1995 calendar
year. Worldwide exploration and appraisal drilling during the half
year yielded encouraging results in PNG (Gobe 6x), Russia
(Prirazlomnoye-5) and Australia (Laminaria-1, Elang-2, Pyrenees-2,
Macedon-4 and Macedon-5).
Service Companies
The profit contribution from Service Companies for the November
1994 half year was Dollar 62 million compared with Dollar 77 million
for the same period last year. Transport had a lower result due to
increased docking charges, lower margins in the USA and generally
higher exchange rates, partly offset by an improved bunkering result.
The Insurance result was lower due to unfavourable investment
revaluations and increased provisions for claims.
Corporate and Unallocated Items
Corporate and unallocated items recorded a loss of Dollar 84
million which was Dollar 43 million more than the loss of Dollar 41
million for the comparative November half year. Whilst favourable
results were achieved on external foreign currency hedging, the major
contributing factor to this lower result was losses incurred by
Treasury on intra group transactions.
The Power Group, which for reporting purposes is included in this
section, had an immaterial effect on this result. The Group is in
its early stage of development but is progressing several
opportunities for integrated projects in South America and Asia.
Outside Equity Interests
Outside equity interests' share of operating profit increased due
mainly to the consolidation of Ok Tedi Mining Limited for six months
compared to two months in the same period last year and improved
results from that company.
Financial
At 30 November 1994 BHP's gearing ratio was 31.6% compared to
35.2% at 31 May 1994.
Interest cover has improved from 4.7 times at 31 May 1994 to 6.3
times at 30 November 1994, excluding abnormal items.
Outlook
The international environment for BHP over the remainder of this
year should improve with the important Japanese economy showing signs
of recovery.
Firmer world growth should underpin improving prices for some of
the Company's key products.
Strong economic growth in Australia should continue to generate
high levels of demand for BHP steel in particular although some
government initiatives can be expected to manage this growth.
The economic environment and the range of new projects in all
Business Groups is conducive to continued growth of shareholder
value.
-0-
Consolidated Group Results
Half year ended
---------------
30 November
-----------
1994 1993 Change
---- ---- ------
Dollar Dollar
------ ------
Million Million %
------- ------- -
Operating revenue
Sales 8 696 8 119 +7.1
Interest revenue 44 39 +12.8
Other revenue 474 185 +156.2
------- -------
9 214 8 343 +10.4
------- -------
Operating profit including abnormal items,
before depreciation, amortisation and
interest expense 2 616 2 014 +29.9
Deduct:
Depreciation and amortisation 771 685 +12.6
Interest expense (b) 182 236 -22.9
------- -------
+Operating profit before income tax (a) 1 663 1 093 +52.2
Deduct:
++ Income tax expense attributable
to operating profit (a) 459 377 +21.8
------- -------
Operating profit after income tax 1 204 716 +68.2
Deduct:
Outside equity interests in operating
profit after income tax 134 76 +76.3
------- -------
Operating profit after income tax,
attributable to members of the BHP Entity 1 070 640 +67.2
======= =======
(a)Operating profit and income tax comprise:
+ Operating profit before abnormal
items and income tax 1 439 1 093 +31.7
++ Income tax expense attributable to
operating profit before abnormal items 469 377
------- -------
Operating profit before abnormal items 970 716 +35.5
+ Abnormal items before income tax 224 -
++ Abnormal income tax benefit 10 -
------- -------
Abnormal items after income tax 234 -
------- -------
Operating profit after income tax 1 204 716 +68.2
======= =======
Consolidated Group Results (continued)
Half year ended
---------------
30 November
-----------
1994 1993 Change
---- ---- ------
Dollar Dollar
------ ------
Million Million %
------- ------- -
Basic earnings per share (c)
Including abnormal items 76.7 c 47.9 c +60.1
Excluding abnormal items 59.9 c 47.9 c +25.1
Earnings per American Depositary Share (d)
Including abnormal items USD 2.27 USD 1.28
Excluding abnormal items USD 1.77 USD 1.28
Average A Dollar / US Dollar
hedge settlement rate 74c 67c
(b)Excludes capitalised interest of AUD 75m AUD 61m
(c)Based on operating profit after income tax attributable to
members of BHP per the weighted average number of Dollar 1.00
fully paid shares. The weighted average number of shares
(1,394,946,735) excludes 307,333,300 BHP shares held by
Beswick (1993 - 322,573,300). Diluted earnings per share is
not reported as it is not materially different from basic
earnings per share.
(d)Each American Depositary Share (ADS) represents four ordinary
Dollar 1.00 shares. Earnings per ADS have been translated to
US dollars using the average A Dollar / US Dollar hedge
settlement rate noted above.
Segment Results
Operating profit after income tax Operating
--------------------------------- ---------
before outside equity interests revenue(1)
------------------------------- -------
Half year ended Quarter ended Half year ended
--------------- ------------- ---------------
Dollar Dollar Dollar
Million Million Million
Nov Nov Nov Aug Nov Nov
1994 1993 1994 1994 1994 1993
------------- ------------ -------------
Industry segments
Minerals 486 260 259 227 2 930 2 375
Steel 344 288 204 140 3 662 3 460
Petroleum(2) 496 261 353 143 2 422 2 317
Service Companies 62 77 51 11 1 084 906
Net unallocated
interest (100) (129) (47) (53) 43 39
Corporate and
unallocated items(3) (84) (41) (45) (39) (34) 10
----- ----- ----- -----
BHP Group 1 204 716 775 429 9 214 8 343
===== ===== ===== ===== ===== =====
(1)Operating revenues do not add to the BHP Group figure due to
inter segment transactions.
(2)The 1994 operating profit includes an abnormal profit of Dollar
234 million.
(3)Includes consolidation adjustments.
-0-
The financial data upon which this report has been based complies
with the requirements of the Corporations Law, with all applicable
accounting standards and gives a true and fair view of the matters
disclosed. The results are unaudited. The Company has a formally
constituted Audit Committee of the Board of Directors.
The Board expects that any dividends paid in the next 12 months
would be fully franked, mainly at 33 cents.
Equity Accounting
The equity method of accounting for associated companies has not
been adopted in preparing the Group results. If equity accounting
had been adopted, it would decrease the operating profit after income
tax attributable to members of BHP by Dollar 11 million excluding
abnormal items (1993 Dollar 14 million loss). Including abnormal
items, the equity accounting result for the current period would have
been a loss of Dollar 166 million (1993 Dollar 4 million loss). The
abnormal items relate to the results of Foster's Brewing Group
Limited.
Since 31 May 1994 there has been no material change in the
composition of the Group's associated companies.
-0-
Issued and Quoted Securities at End of Half Year
Par Paid-up
--- -------
Number Of which value value
------ -------- ----- -----
on issue quoted cents cents
-------- ------ ----- -----
Ordinary Shares
Fully paid 1,716,404,644 1,716,404,644 100 100
Partly paid 11,340,000 - 100 1
Partly paid 1,605,000 - 100 5
of which issued during six
months to 30 November 1994
Employee Share Plan (ESP) 16,000 16,000 100 100
ESP Options Exercised 35,500 35,500 100 100
Bonus Share Plan 3,230,421 3,230,421 100 100
Dividend Investment Plan 21,502,671 21,502,671 100 100
Executive Share Scheme 1,600,000 - 100 1
Number Of which Exercise Exercise
------ -------- -------- --------
on issue quoted price period
-------- ------ ----- ------
Dollar
------
Ordinary share options none
of which were issued
in the current half year
Employee Share Plan 5,738,600 - 17.06 May 1997-
May 1999(1)
(1)May be exercised earlier if employment is terminated.
-0-
This report is made in accordance with a resolution of the Board
of Directors.
A further release will be made to the Australian Stock
Exchange Ltd when the balance of the information required by its
Listing Rules is available.
-- Secretary
The Broken Hill Proprietary Company Limited
CONTACT: The Broken Hill Proprietary Co. Ltd. Pierre Pierre (pēr), city (1990 pop. 12,906), state capital (since 1889) and seat of Hughes co., central S.Dak., on the east bank of the Missouri River, opposite Fort Pierre; inc. 1883. Hirsch Hirsch (deer in German and Yiddish) may refer to:
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion