The big Australian reported overnight and there was a lot to unpack in the update. The stock rallied in London & fell heavily in the US, down over 6%.
- The result itself was a big one although the market was positioned for it. Revenue of $US60.82bn was a 2% beat to expectations, EBITDA of $37.38bn was inline while NPAT at $17.08bn was a ~2% miss. The FY dividend of $US3.01 was inline with the $US2.99 expected however to put that dividend into perspective, it’s more than 2x the size of the next highest full year dividend ever.
- They announced the demerger / sale of their Petroleum division to Woodside (WPL). While there is a lot to consider here, the division is very capital intensive and the move allows BHP to focus on ‘commodities of the future’ like Potash which underpins food production.
- To that end, they approved a large Potash investment.
- And finally, they announced the un-bundling of their UK structure to further simplify the business although they will retain a listing in the UK and South Africa. This is the reason for the large share price decline in the US ADR’s.
MM has moved to a more neutral stance on BHP
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