BHP Billiton Prospects Bright Despite Weak Q1 Production
Zacks Investment Research | Oct 18, 2016 10:12PM ET
BHP Billiton (LON:BLT) Limited (NYSE:BHP) reported weak production results for first-quarter fiscal 2017 (ended September 30, 2016). Output volumes of major products like petroleum, copper, iron ore and energy coal were lower than the values recorded in the year-ago quarter. However, metallurgical coal registered growth.
In the quarter, the company's aggregate petroleum production was 55 million barrels of oil equivalent (MMboe), down 15% year over year. The deterioration was attributable to lower production of natural gas and condensate liquids as well as weaker crude oil production. However, the previously stated guidance range for aggregate petroleum production in fiscal 2017 is still unchanged at 200–210 MMboe.
Aggregate copper output was 355 million tonnes (Mt), down 6% year over year. The downside was witnessed due to lower grades.
Gross production of iron ore in the quarter was 58 Mt, flat year over year. The fiscal 2017 guidance for iron ore production remained unchanged in the range of 228–237 Mt.
Total energy coal output was 7 Mt, down 4% year over year. The downside stemmed from factors like disinvestment of the San Juan mine, operational rescheduling in certain mines and unfavorable climatic conditions.
However, metallurgical coal production during the quarter was 11 Mt, up 1% year over year. The upside was driven by increased truck utilization and wash-plant activities across all the mines.
Share price of BHP Billiton was $34.49 per share as of Oct 18, 2016.
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