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Actionable news in BBL: BHP BILLITON PLC,

Are Better Days Ahead For BHP?

Summary

Reports historic loss.

With operating cash flows reduced to almost half, cuts dividends by 76%.

Promises better days ahead, citing "broad suite of opportunities".

Samarco, shale and commodities - too much to handle

Source: Simplywall.st

BHP Billiton (NYSE:BBL) reported a US$7.25 billion in loss before taxes for the fiscal year ended 30 June 2016, compared to US$8.05 billion profit a year ago. With net operating cash flow almost cut in half - US$10.62 billion versus US$19.29 billion last year - the miner hardly had any options other than cutting the dividend substantially. Shareholders will be getting a US30 cents per share dividend payout compared to last year's 124 cents.

The impact of weak performance from its shale and mining operations, as the entire resources sector experienced a decade-low in output prices, already reflected in its last-year's 21.4% revenue contraction. The weakness in resources sector still persists, revenues dropped 29.8% this year, but the Samarco dam failure in November 2015 added salt to the injury, steepening the losses. The investments in the Brazilian project were written down to zero apart from US$1.2 provision for uncertain costs going forward.

Calling it resilient

Despite such a weak performance, the company indicated the results to be reflective of its resilience. This argument is primarily based on an underlying EBITDA of US$12.3 billion, although 44% below the last year's...


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