Investment Matters

Company news: BHP

BHP Billiton released its final quarterly production report for FY-16.  Petroleum and copper production were in accordance with expectations, but iron ore production was a little lower at 55.6mt. 

In fact, for FY-16, BHP beat production guidance for all commodities except iron ore (although production volumes were down absolutely YoY).  Realised prices for production sales were, unsurprisingly, down considerably versus prior periods; the price perhaps a little lower than our expectations.

BHP provided production guidance for all of its operations for FY-17.   Iron ore production volumes are expected to increase to 4% in FY-17, as capacity improvements (e.g. crusher and conveyor at Jimblebar) kick in (especially in H2).  Production volumes of copper and metallurgical coal are forecast to increase in the same order. 

Petroleum production is expected to decrease materially; by between 24% and 29% lower, driven by US onshore operations. 

This is in response to difficult conditions in the oil and gas market.  BHP also plans to reduce thermal coal production by 7% in FY-17 (vs FY-16).