What does the BHP result tell us about growth?

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Via Deutsche:

Remains a FCF and de-gearing story near term

BHP has reported 1H FY17 underlying NPAT of US$3.2b and EBITDA of US$9.9b, slightly above our US$3.0b and US$9.8b estimates respectively. Operating cash flow was strong and net debt decreased by US$6b HoH to US$20.1b, but was assisted by a US$2b non-cash benefit. Capex guidance has been increased slightly but is mostly due to higher stripping at Escondida. Growth projects were highlighted, but these still seem long dated, and the near term focus remains on debt reduction. We model little growth in Cu Eq terms over the next decade due to declining oil volumes. We have reduced earnings on higher costs at Escondida and OD. HOLD on valuation.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.