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BHP Billiton's earnings are strong despite price weakness (Part 7 of 12) (Continued from Part 6) Mixed production results
BHP’s (BHP) alumina production was broadly unchanged in the December 2014 half year at 2.6 million tons, including record production at the Alumar refinery. BHP aluminum production declined by 16% in the same period to 517 kilotons. The decline reflects the suspension of smelter capacity at Alumar and the cessation of smelting activities at Bayside. Manganese ore and alloys reported strong production growth of 7% year-over-year (or YoY) due to an improvement in ore recovery at Mamatwan.
Strong financial performance
Underlying EBIT for the December 2014 half year increased by $568 million to $716 million. Higher average realized prices for alumina, aluminum, and nickel, and a stronger US dollar increased EBIT by $368 million and $170 million, respectively. These factors along with reduction in controllable cash costs, including continued focus on labor and contractor productivity led EBIT to rise 384% YoY.
Outlook
Aluminum demand growth has been strong. New supply is expected to continue curtailing high-cost capacity. This should benefit BHP and its peers like Rio Tinto (RIO) and Alcoa (AA). BHP, RIO, and AA form 32.3% of the iShares MSCI Global Metals & Mining Producers ETF (PICK). The SPDR S&P Metals & Mining ETF (XME) also invests in some of these stocks.
The nickel market isn’t picking up as analysts had expected following a ban on nickel exports by Indonesia. MMC Norilsk Nickel (NILSY) has projected flat nickel production in fiscal year 2015.
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
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CODE : NILSY |
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ISIN : US46626D1081 |
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ProfileMarket
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Asset profileContact Cpy |
Norilsk is a nickel producing company based in Russia. Norilsk produces nickel, chromium, cobalt, copper, gold, gold , lead, palladium and platinum in Australia, in Botswana, in Russia and in South Africa, develops cobalt, copper and nickel in Australia and in Botswana, and holds various exploration projects in Australia and in Russia. Its main assets in production are WATERLOO and SILVER SWAN in Australia, TATI NICKEL in Botswana, NKOMATI OXIDE MASSIVE CHROMITE and NKOMATI MINE & EXPANSION in South Africa and TAIMYR PENINSULA, ZHDANOVSKOE, J-M REEF and OLYMPIADA in Russia, its main assets in development are BLACK SWAN, LAKE JOHNSTON, CAWSE and HONEYMOON WELL in Australia and SELKIRK in Botswana and its main exploration properties are JERICO in Australia and NATALKA and VERMINSKOE in Russia. Norilsk is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is 143.3 millions as of today (€ 136.5 millions). Its stock quote reached its highest recent level on March 31, 2006 at 98.55, and its lowest recent point on December 06, 2022 at 3.02. Norilsk has 47 442 200 shares outstanding. |