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BHP Billiton Offers Update on Operational Metrics - Analyst Blog

Mining giant BHP Billiton Limited ( BHP ) recently reported strong performance for the first half of fiscal 2014 (ended Dec 31, 2014). The company achieved record yield in five commodities and eight operational facilities. However, productivity volumes of copper, aluminum and nickel in fourth-quarter 2014 declined from the year-ago tally.

Last quarter, the production of metallurgical coal and manganese alloys increased 17% and 21% year over year to 13,538 kilotons and 201 kilotons, respectively. Remarkable improvement in the fabrication scale of metallurgical coal was primarily driven by efficient output mass from the company's Queensland and Illawarra coal mines. On the other hand, superior smelting activities, and easy accessibility of both Metalloys and TEMCO supported the increased production of manganese alloys.

Production volumes of petroleum, natural gas, crude oil and condensate also increased from the year-ago value. However, aluminum and nickel production declined 15% and 10% year over year to 256 kilotons and 34.2 kilotons, respectively. In the upcoming fiscal year, BHP Billiton has decided to conduct its exploration activities in the reserves located in Western Australia, Tobago, Trinidad and Gulf of Mexico.

A few days back, the company had proposed a de-merger within its business structure, aiming to create a new company named South32. The shareholders would receive details documentation regarding the de-merger by Mar 2015. BHP Billiton is expected to release the earnings for first half fiscal 2015 on Feb 23.

BHP Billiton has maintained its fabrication guidance for the upcoming fiscal year. By the end of fiscal 2015, the company aims to achieve 16% cumulative production growth over the last two years. However, certain external market headwinds, such as equipment shortage, volatile prices of metals, mounting operating expenses and labor crisis, are adversely affecting the company's trade.

BHP Billiton currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the industry include Denison Mines Corp. ( DNN ), Platinum Group Metals Ltd. ( PLG ) and Alcoa Inc. ( AA ). All three stocks currently hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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