Via UBS:
Results below expectations, dividend small consolation
Today’s result did not quite meet market expectations, which was largely due to oneoffs such as smelter maintenance at OD, a fire at WAIO, and write-offs at Escondida. Underlying EBITDA was US$11,238m (+14% y/y) vs UBSe US$11,838m & cons of US$11,593m. FCF of US$4.9bn beat UBS expectations of US$3.8bn. BHP announced an interim dividend (above its 50% minimum payout policy) of US55cps (+38% y/y) vs UBSe US56cps & cons of US49cps (fully franked). As with all miners currently, BHP’s ability to return cash to shareholders is a function of a strong commodity pricing environment, which generated an extra US2.2bn in benefits (net of price-linked costs). We retain our Buy rating, with revised estimates and a slightly higher price target of A$33.50ps on the back of BHP having the potential to generate more than US$7bn FCF in the second half at spot prices.
