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BHP surges as H1 results beat estimates, capex lowered, dividends raised

Feb. 24, 2015 12:28 PM ETBHP Group Limited (BHP) StockBHPBy: Carl Surran, SA News Editor1 Comment
  • BHP Billiton (BHP +5.5%) is rallying after H1 results turned out better than expected even as profits plunged against a backdrop of plummeting commodity prices.
  • Despite the 47% fall in H1 profit, BHP still will raise its interim dividend by 5% to $0.62/share and pledges to maintain or increase its dividend even after a proposed de-merger later this year which will see BHP hive off some unwanted assets into the separate South32 company that analysts estimate will be worth ~$15B.
  • BHP's costs have fallen faster than expected: Capital spending dropped 23% in H1, and BHP now will spend less this fiscal year and next than it had expected, cutting its original spending plans by 15% to $12.6B (£8.2B) for FY 2015 and to $10.8B in 2016.
  • BHP’s aluminum, manganese and nickel business - mostly part of South32 - was the only division to improve its Y/Y operating profit, while prices for iron ore, oil and copper - the flagship commodities of the streamlined BHP - have slumped, so BHP's next task is to convince investors that it makes sense to be less diversified.

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