Interim Results
Broken Hill Proprietary Co Ld
17 December 1999
BHP Half Year Profit Report
November 1999
Half year ended 30
November
Results Summary 1999 1998 Change
Operating revenue ($ million)
- Sales revenue 9 527 9 954 -4.3%
- Other revenue 610 614 -0.7%
10 137 10 568 -4.1%
Operating profit attributable
to BHP shareholders ($ million)
- Excluding abnormal items 809 436 +85.6%
- Including abnormal items 1 081 436 +147.9%
Basic earnings per share (cents)
- Excluding abnormal items 46.0 25.3 +81.8%
- Including abnormal items 61.5 25.3 +143.1%
Significant Features
- lower costs in all businesses;
- benefits from the closure of loss making businesses;
- profits from diamond sales at the EKATI diamond mine
(Canada);
- lower borrowing costs due to lower average debt levels;
- lower prices for coal, steel and iron ore partly offset
by higher crude oil prices;
- lower capitalised interest following completion of major
projects;
- abnormal tax benefits.
Group Results and Dividend
Half Year Result
The operating profit after income tax excluding abnormal items attributable to
BHP shareholders for the half year ended 30 November 1999 was $809 million, an
increase of $373 million or 85.6% compared with the corresponding period.
Including abnormal items, the profit was $1 081 million, an increase of $645
million compared with the corresponding period. The result included a net
abnormal profit of $272 million, comprising:
- a tax benefit of $160 million arising from the restatement of deferred tax
balances as a consequence of the Australian company income tax rate change
to 34% applicable from 1 July 2000, and then to 30% applicable from 1 July
2001; and
- a tax benefit of $112 million arising from finalization of funding
arrangements in August 1999 related to the Beenup mineral sands project.
For details of abnormal items by segment, refer to page 14. There were no
abnormal items in the corresponding period.
Basic earnings per share were 46.0 cents excluding abnormal items and 61.5 cents
including abnormal items. Comparative earnings per share for the half year
ended 30 November 1998 were 25.3 cents.
Dividend
An unfranked dividend of 25 cents per share was declared and paid during the
half year, the same amount as the dividend in the corresponding period.
The Dividend Investment Plan was suspended following payment of the half yearly
dividend on 24 November 1999. Since the dividend was unfranked, the Bonus Share
Plan (BSP) was suspended in accordance with the Company's Constitution and Rule
8 of the BSP on 17 September 1999.
Change of financial year
Directors announced that the financial year end for the BHP Group would change
from 31 May to 30 June with effect from 30 June 2000. The Company will report
results for the 13 months to 30 June 2000 and release to the Australian Stock
Exchange (ASX) on 27 July 2000. The Company's profit report for the period
ending 31 March 2000 will be released to the ASX on 4 May 2000.
Operating result excluding abnormal items
The following major factors affected operating profit after income tax,
excluding abnormal items, attributable to BHP shareholders for the half year
ended 30 November 1999 compared with the corresponding period:
Costs
Lower costs of approximately $430 million ($275 million after tax) were achieved
during the half year compared with the corresponding period. Benefits from cost
reduction initiatives continue to be reflected in lower production and overhead
costs throughout BHP, with significant reductions being achieved within the
Minerals and Steel businesses. In addition, lower borrowing costs resulted from
a reduction in funding levels.
Exchange rates
Compared with the corresponding period, foreign currency fluctuations net of
hedging had a favourable effect of approximately $90 million.
Exploration expenditure
Exploration expenditure charged to profit decreased by approximately $70 million
compared with the corresponding period mainly reflecting a reduction in the
Minerals worldwide exploration program.
Ceased/Sold operations
Decisions to close or cease operations including the Hartley platinum mine
(Zimbabwe), Beenup mineral sands operation (Western Australia) and North America
copper had a favourable effect on results of approximately $105 million compared
with the corresponding period. This was partly offset by profits of
approximately $50 million in the corresponding period from manganese operations
and other assets sold.
New operations
Profits from diamond sales at the EKATI.TM diamond mine were
approximately $80 million for the half year. This was partly offset by
operating losses in the current half year of approximately $60 million
following the start up of the HBI operation (Western Australia).
Volumes
Higher sales volumes have increased profit by approximately $10 million compared
with the corresponding period. This reflects the return to normal operating
conditions at Bass Strait (Victoria) following the Longford incident in
September 1998.
Prices
Most of BHP's major products (including coal, steel and iron ore) continued to
be affected by lower commodity prices, which has reduced profit by approximately
$295 million compared with the corresponding period. These reductions were
partly offset by higher average realised oil prices after commodity hedging
which increased the result by approximately $150 million compared with the
corresponding period.
Asset sales
Profits from sale of assets were approximately $20 million lower than in the
corresponding period.
Business Results (after income tax)
Half year ended 30 November (1)
Excluding abnormals Including abnormals
1999 1998 Change 1999 1998 Change
$ Million $ Million % $ Million $ Million %
Minerals 533 569 -6.3 582 569 +2.3
Steel 169 204 -17.2 232 204 +13.7
Petroleum 410 201 +104.0 459 201 +128.4
Services 40 82 -51.2 45 82 -45.1
Net unallocated
interest (252) (232) (256) (232)
Group and
unallocated items (110) (373) - (373)
Operating profit
before outside
equity interests 790 451 +75.2 1,062 451 +135.5
Outside equity
interests 19 (15) 19 (15)
Operating profit
attributable to
members of the
BHP Equity 809 436 +85.6 1,081 436 +147.9
(1) Comparative figures have been restated to reflect the transfer of internal
currency hedging results from Minerals, Steel and Petroleum to Group and
unallocated items, following a decision to cease new internal hedging
effective 1 June 1999. The results of existing internal currency hedging
activities now eliminate within Group and unallocated items.
Minerals
Minerals' result for the half year was a profit of $533 million, a decrease of
$36 million or 6.3% compared with the corresponding period.
Including an abnormal tax benefit relating to the restatement of deferred tax
balances following the change in the Australian company tax rate, the result for
the half year was a profit of $582 million. There were no abnormal items in the
corresponding period.
Major factors which contributed to the result were:
* significantly lower average US dollar coal prices for Bowen Basin
(Queensland), Illawarra (New South Wales) and Kalimantan (Indonesia);
* lower average US dollar iron ore prices and volumes;
* unfavourable effect of the higher A$/US$ exchange rate;
* operating losses resulting from start up of the HBI operation which was
commissioned in January 1999;
* lower operating profits due to the sale of principal manganese assets in
December 1998; and
* lower profit from the sale of assets.
These were partly offset by:
* losses in the corresponding period from ceased operations including the
Hartley platinum mine, North America copper and the Beenup mineral
sands operation;
* lower unit costs at coal operations in Queensland and the Cannington
silver-lead-zinc mine (Queensland);
* profits from diamond sales at the EKATI diamond mine which commenced sales
in January 1999;
* lower exploration expenditure charged to profit;
* tax benefiting of certain prior year exploration expenditure; and
* inclusion of equity accounted profits from BHP's investment in the Samarco
iron ore operations (Brazil), following adoption of the revised
accounting standard AASB 1016: Equity Accounting.
Sales revenue was $4 036 million, 16.2% lower than in the corresponding period,
mainly due to lower prices for iron ore, coal and copper, lower iron ore volumes
and lower copper volumes following the closure of North America copper
operations.
The average price booked for copper shipments, after hedging and finalization
adjustments, for the half year was US$0.76 per pound (1998 - US$0.78).
Finalization adjustments after tax, representing adjustments on prior period
shipments settled in the November 1999 half year were $32 million favourable
(1998 - $9 million unfavourable).
Unhedged copper shipments not finalised at 30 November 1999 have been brought to
account at US$0.80 per pound. The LME copper spot price on Tuesday 30 November
1999 was US$0.79 per pound.
As at 30 November 1999, for the three months ending 28 February 2000 anticipated
shipments are 22% covered by forward contracts at an average price of US$0.77
per pound, 1.0% covered by call options at an average price of US$0.84 per
pound, and 15% covered by collar options with a minimum price of US$0.74 per
pound and maximum price of US$0.90 per pound. For the three months ending 31
May 2000 anticipated shipments are 6% covered by forward contracts at an average
price of US$0.81 per pound and 15% covered by collar options with a minimum
price of US$0.74 per pound and maximum price of US$0.90 per pound.
Exploration expenditure was $30 million for the half year (1998 - $115 million)
and the charge against profit was $25 million (1998 - $97 million), reflecting a
reduction in the worldwide exploration program.
Significant developments during the half year included:
* closure of North America copper operations on 25 June 1999, with the
exception of the Solvent Extraction and Electro Winning plants, and the
San Manuel Rod Plant which was operated to complete fulfilment of
contractual obligations. The San Manuel Rod Plant ceased operations on
October 25 1999;
* suspended operations at the Hartley platinum mine pending conditional
sale;
* very encouraging market acceptance of EKATI diamonds traded through our
new Antwerp (Belgium) office;
* sale of the Moura (Queensland) coal mine on 20 August 1999; and
* scientific reports were released by Ok Tedi Mining Limited (OTML),
confirming that the environmental impact of the Ok Tedi mine and the area
of land affected would be significantly greater than indicated by previous
studies. The reports show that none of the options considered by OTML offers
a clear solution to these environmental impacts. BHP has embarked
upon open consultation with all stakeholders of the operation - the PNG
Government, the Provincial Government, the communities surrounding the mine
and along the Ok Tedi and Fly River as well as shareholders. The PNG
Government has requested that the World Bank evaluate the current
situation. BHP has agreed with a request from the PNG Government to provide
pertinent information and assist the World Bank with any matters. The
World Bank study is expected to be completed by June 2000.
Steel
Steel's result for the half year was a profit of $169 million, a decrease of
$35 million or 17.2% compared with the corresponding period.
Including an abnormal tax benefit relating to the restatement of deferred tax
balances following the change in the Australian company tax rate, the result for
the half year was a profit of $232 million. There were no abnormal items in the
corresponding period.
Major factors which contributed to the result were:
* a decline of approximately 8% in US dollar prices for major export
products;
* lower prices for products from operations in the USA and Asia;
* lower domestic prices; and
* lower sales volumes from Long Products operations.
These were partly offset by:
* improved cost and operating performance from overseas coating operations
and North Star BHP Steel (USA); and
* lower raw material costs.
Total steel despatches from all operations were 4.042 million tonnes, 1.8% below
the corresponding period:
- Australian domestic despatches were 2.128 million tonnes, up 1.2%;
- Australian export despatches were 1.258 million tonnes, down 14.2%;
- New Zealand steel despatches were 0.287 million tonnes, up 7.1%; and
- despatches from overseas plants were 0.369 million tonnes, up 33.2%.
Significant developments during the half year included:
* the release of the Steel Strategic Plan, organising the Steel portfolio
into core and non-core businesses. The Company is in the process of
pursuing the divestment of its non-core steel businesses;
* closure of primary steel making operations at Newcastle (New South Wales);
and
* improvements in global market conditions for steel products have led to
steady increases in export steel prices which are beginning to impact
financial results.
Petroleum
Petroleum's result for the half year was a profit of $410 million, an increase
of $209 million or 104.0% compared with the corresponding period.
Including an abnormal tax benefit relating to the restatement of deferred tax
balances following the change in the Australian company tax rate, the result for
the half year was a profit of $459 million. There were no abnormal items in the
corresponding period.
Major factors which contributed to the result were:
* higher average realised oil prices before commodity hedging of A$32.99 per
barrel (1998 - A$21.77 per barrel), reflecting higher US dollar prices (1999
- US$21.41 per barrel; 1998 - US$13.20 per barrel), partly offset by the
effect of the higher A$/US$ exchange rate;
* higher sales volumes in Bass Strait reflecting the return to normal
operating conditions following the Longford incident in September 1998;
* higher profits from the sale of assets. The current period included a
$31 million profit (after tax) following Finalization of the sale of
exploration and producing assets in the UK Southern North Sea. The
corresponding period included a $13 million profit (no tax effect) on sale
of the Timor Sea (North West Australia) producing facilities of Jabiru and
Challis and the abandoned Skua field; and
* lower discretionary and overhead costs, including business development
activities, following the implementation of cost review programs in
Australia and the UK.
These were partly offset by:
* A net loss of $79 million (after tax) resulting from commodity hedging
activities compared with a net gain of $2 million on significantly lower
volumes in the corresponding period. The average realised oil price after
commodity hedging was US$19.16 per barrel (1998 - US$13.25 per barrel).
As at 30 November 1999, for the three months ending 29 February 2000,
2.0 million barrels of estimated oil and condensate sales (after third party
entitlements) have been hedged at an average price of US$21.15 per barrel, and
7.8 million barrels are covered by zero cost collar options with a downside
average of US$15.97 per barrel and an upside average of US$21.78 per barrel.
For the three months ending 31 May 2000, 3.3 million barrels of estimated oil
and condensate sales (after third party entitlements) have been hedged at an
average price of US$20.82 per barrel, and 5.1 million barrels are covered by
zero cost collar options with a downside average of US$17.23 per barrel and an
upside average of US$23.55 per barrel.
Oil and condensate production was 9% higher than the corresponding period due to
higher production at Bass Strait, the recently commissioned Laminaria/Corallina
fields (North West Australia), and higher gas nominations at Bruce (UK). These
were partly offset by lower production following the sale of producing assets in
the Timor Sea (North West Australia) and the sale of Elang/Kakatua/Kakatua North
producing fields, lower production from Griffin (Western Australia) reflecting
natural field decline, and lower Liverpool Bay (UK) production due to repairs
and maintenance. Natural gas production was 4% lower mainly due to the sale of
the UK Southern North Sea assets, lower Victorian demand for Bass Strait gas and
lower Griffin production. This has been partly offset by higher gas production
from the offshore US producing properties due to increased facility capacity.
Exploration expenditure for the half year was $100 million (1998 -
$140 million). Exploration expenditure charged to profit was $79 million (1998
- $79 million).
Significant developments during the half year included:
- Finalization of the sale of all exploration and producing assets in the UK
Southern North Sea;
- agreement was reached with PowerGen UK plc on a further re-negotiation of
gas price contractual arrangements for Liverpool Bay effective 1 June 1999
which resulted in the payment of $220 million to BHP in November 1999. This
payment represents full value for gas revenues foregone resulting from a
reduced base price for gas sold under the agreement and will be amortised
on a units of production basis over the five year agreement period. This
transaction follows a similar re-negotiation in December 1998;
- settlement with the State of Hawaii which will result in BHP's dismissal
from the antitrust lawsuit brought against a number of oil companies
(Hawaii Antitrust Claim). The settlement is subject to approval in the US
District Court in Hawaii; and
- initial oil production commenced from the Laminaria and Corallina
oil fields via the floating production storage and off loading facility
'Northern Endeavour' on 7 November 1999.
Services
Services' result for the half year was a profit of $40 million, a decrease of
$42 million or 51.2% compared with the corresponding period.
Including an abnormal tax benefit relating to the restatement of deferred tax
balances following the change in the Australian company tax rate, the result for
the half year was a profit of $45 million. There were no abnormal items in the
corresponding period.
The major factor which contributed to the variation was a $46 million profit (no
tax effect) on the partial sale of BHP's investment in Orbital Engine
Corporation Limited in the corresponding period.
Significant developments during the current half year included:
- sale of BHP Engineering;
- sale of the bulk carrier Iron Newcastle;
- investment in the Belgian shipping company Cobam N.V.; and
- completion of the sale of Hunter Towage Services Pty Ltd.
Net unallocated interest
Net Unallocated Interest expense was $252 million for the half year compared
with $232 million for the corresponding period. This increase was mainly due to
lower capitalised interest in the current half year for HBI, Escondida and
EKATI, lower interest income, an over provision for income tax in the
corresponding period and higher interest rates in the US and Australia, largely
offset by lower funding levels.
Including an abnormal tax expense relating to the restatement of deferred tax
balances following the change in the Australian company tax rate, Net
Unallocated Interest expense for the half year was $256 million. There were no
abnormal items in the corresponding period.
A significant development during the current half year was the Federal Court
ruling in BHP's favour regarding a dispute concerning the deductibility of
financing costs paid to General Electric Company in connection with the
acquisition of the Utah Group in the early 1980's. The Australian Taxation
Office has subsequently appealed the decision. No adjustments will be made to
the Group accounts pending conclusion of this matter.
Group and unallocated items
The result for Group and unallocated items was a loss of $110 million for the
half year compared with a loss of $373 million for the corresponding period.
The improvement was mainly due to lower losses of $80 million (after tax) from
external foreign currency hedging compared with losses of $249 million in the
corresponding period.
Including abnormal items the result was nil for the half year. The abnormal
items comprised:
- a tax benefit of $112 million arising from Finalization of funding
arrangements in August 1999 related to the Beenup mineral sands project; and
- a tax expense of $2 million relating to the restatement of deferred tax
balances following the change in the Australian company tax rate.
There were no abnormal items in the corresponding period.
Outside equity interests
Outside equity interests' share of operating profit decreased mainly due to
adjustments attributable to minority shareholders of the Moura coal mine
following completion of the sale in August 1999, and a lower result at Ok Tedi
during the current half year.
Consolidated Financial Results
Half year ended 30 November
1999 1998 Change
$ Million $ Million %
Operating revenue
Sales 9 527 9 954 -4.3
Interest revenue 42 99 -57.6
Other revenue 568 515 +10.3
10 137 10 568 -4.1
Operating profit including abnormal
items, before depreciation, amortisation,
and borrowing costs 2 531 2 302 +9.9
Deduct: Depreciation and amortisation 962 1 075 -10.5
Borrowings costs (1) 355 390 -9.0
*Operating profit before tax (a) 1 214 837 +45.0
Deduct: **Income tax expense
attributable to operating profit (a) 152 386 -60.6
Operating profit after income tax 1 062 451 +135.5
Outside equity interests in
operating profit after income tax 19 (15)
Operating profit after income tax,
attributable to members of the
BHP Equity 1 081 436 +147.9
(a) The operating profit after income
tax, attributable to members of
the BHP, Entity comprises:
* Operating profit before normal items
and income tax 1 214 837 +45.0
** Income tax expense attributable to
operating profit before
abnormal items (424) (386)
Operating profit after income tax
before abnormal items 790 451 +75.2
Outside equity interests in operating
profit after income tax before abnormal
items 19 (15)
Operating profit after income tax, before
abnormal items, attributable to members
of the BHP Entity 809 436 +85.6
* Abnormal items included in operating
profit before income tax - -
** Abnormal income tax benefit 272 -
Abnormal items after income tax 272 -
Operating profit after income tax,
attributable to members of the
BHP Entity 1 081 436 +147.9
Average A$/US$ hedge settlement rate 65c 61c
(1) Excludes capitalised interest of $17m $121m
Revenue
Sales revenue of $9 527 million decreased by $427 million or 4.3% compared with
the corresponding period, mainly due to lower prices for coal, steel and iron
ore, and lower copper volumes reflecting the closure of North America copper
operations. Other revenue, including interest income, decreased by $4 million.
Total operating revenue decreased by $431 million to $10 137 million.
Depreciation and Amortisation
Depreciation and amortisation charges decreased by $113 million to $962 million.
The decrease relates mainly to depreciation in the corresponding period on
businesses now closed, ceased operating or sold, the favourable effect of
exchange rate variations and lower depreciation following the write-down of
certain assets at 31 May 1999. These decreases were partly offset by higher
depreciation following commissioning of the EKATI diamond mine, and the
Escondida oxide plant and phase 3.5 expansion project, and higher Petroleum
production.
Borrowing costs
Borrowing costs decreased by $35 million to $355 million, mainly due to lower
funding levels partly offset by lower capitalised interest and higher interest
rates in the US and Australia.
Income Tax Expense
Excluding abnormal items, income tax expense of $424 million was $38 million
higher than for the corresponding period. The charge for the half year
represented an effective tax rate of 34.9% (1998 - 46.1%) which is lower than
the nominal Australian tax rate of 36% primarily due to partial recognition of
tax benefits mainly in respect of prior year overseas exploration expenditure
which have been recognised due to increased income from North American
Operations, in addition to prior year over provisions. These factors were
partly offset by non-deductible interest expense on preference shares,
non-deductible accounting depreciation and amortisation, and overseas
exploration expenditure for which no deduction is presently available.
Financial ratios
At 30 November 1999 BHP's gearing ratio was 50.4% compared to 54.2% at May 1999.
Based on earnings before interest paid and tax (EBIT) excluding abnormal items
interest cover for the half year was 4.2 times compared with 1.8 times for the
May 1999 year and 2.4 times for the corresponding period. Based on earnings
before interest paid, tax and depreciation (EBITDA) excluding abnormal items
interest cover for the half year was 6.8 times compared with 4.2 times for the
May 1999 year and 4.5 times for the corresponding period.
Statutory Information
Half year ended
30 November
1999 1998
Basic earnings per share (cents) (1)
- Excluding abnormal items 46.0 25.3
- Including abnormal items 61.5 25.3
Diluted earnings per share (cents)
- Excluding abnormal items 45.3 25.2
- Including abnormal items 60.2 25.2
Basic earnings per American Depositary
Shares (US cents) (2)
- Excluding abnormal items 58.6 31.8
- Including abnormal items 78.4 31.8
Interim dividend paid (cents)(3) 25.0 25.0
(1) Based on operating profit after income tax attributable to members of the
BHP Entity divided by the weighted average number of fully paid ordinary
shares. The weighted average number of shares was 1,758,419,578 (1998 -
1,723,800,955 excluding 338,066,630 BHP shares held by the Beswich Group
which were bought back and cancelled in March 1999).
(2) Each American Depositary Share (ADS) represents two fully paid ordinary
shares. Translated at the noon buying rate on Tuesday 30 November 1999 as
certified by the Federal Reserve Bank of New York, A$1=US$0.6371 (1998
A$1 = US$0.6280).
(3) Dividend paid during the half year ended 30 November 1999 was unfranked
(1998 - fully franked at 36 cents in the dollar).
Financial Data
The financial data upon which this report has been based complies with the
requirements of the Corporations Law, with all applicable Australian Accounting
Standards and Urgent Issues Group Consensus Views, and gives a true and fair
view of the matters disclosed. The results are subject to audit review. The
Company has a formally constituted Audit Committee of the Board of Directors.
The Board expects that dividends paid in the next 12 months will not be franked.
This report is made in accordance with a resolution of the Board of Directors.
The statutory BHP Half Year Report - November 1999 will be lodged with the ASX
and the Australian Securities and Investments Commission in February 2000. This
information will be available to shareholders on request.
RJ Flew
Company Secretary
The Broken Hill Proprietary
Company Limited
For information contact:
Media Relations: Mandy Frostick:
(BH) (61 3) 9609 4157
(AH):(61 3) 9687 6651
Mobile: (61) 0419 546 245
Email: frostick.mandy.mj@bhp.com.au
Investor Relations: Dr Robert Porter:
(BH) (61 3) 9609 3540
Email: porter.robert.r@bhp.com.au
Pierre Hirsch:
(BH) (1 415) 774 2030
Email: hirsch.pierre.pl@bhp.com.au
Supplementary Information - Segment Results
Half yearly comparison - November 1999 with November 1998 (1)(2)
Half year ended 30 November 1999
Operating Revenue (3) Operating Profit
$Million $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (4) amort'n costs
4 036 199 4 235 Minerals 1 183 (413) -
3 680 31 3 711 Steel 475 (210) -
1 837 240 2 077 Petroleum 939 (314) -
868 76 944 Services 76 (18) -
- 25 25 Net unallocated 25 - (355)
interest
(107) 39 (68) Group and (167) (7) -
unallocated
items(7)
9 527 610 10 137 BHP Group 2 531 (962) (355)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(5) items tax(6) after tax
Minerals 770 (237) 49 582
Steel 265 (96) 63 232
Petroleum 625 (215) 49 459
Services 58 (18) 5 45
Net unallocated (330) 78 (4) (256)
interest
Group and unallocated
items (7) (174) 64 110 -
BHP Group 1 214 (424) 272 1 062
Half year ended 30 November 1998
Operating Revenue (3) Operating Profit
$Million $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (4) amort'n costs(8)
4 815 267 5 082 Minerals 1 432 (450) -
4 064 48 4 112 Steel 558 (234) -
1 449 38 1 487 Petroleum 671 (343) -
1 090 182 1 272 Services 133 (38) -
- 75 75 Net unallocated 75 - (390)
interest
(379) 4 (375) Group and (567) (10) -
unallocated
items(7)
9 954 614 10 568 BHP Group 2 302 (1 075) (390)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(5) items tax after tax
Minerals 982 (413) - 569
Steel 324 (120) - 204
Petroleum 328 (127) - 201
Services 95 (13) - 82
Net unallocated (315) 83 - (232)
interest
Group and unallocated
items (7) (577) 204 - (373)
BHP Group 837 (386) - 451
(1) Before outside equity interests
(2) Comparative figures have been restated to reflect the transfer of internal
currency hedging results from Minerals, Steel and Petroleum to Group and
unallocated items. The results of internal currency hedging activities
eliminate within Group and unallocated items.
(3) Operating revenues do not add to the BHP Group figure due to intersegment
transactions.
(4) Result for all Businesses except Net unallocated interest is equivalent to
earnings before borrowing costs, income tax expense, depreciation and
amortisation.
(5) Result of all Businesses except Net unallocated interest is equivalent
to earnings before borrowing costs and income tax expense.
(6) Tax benefit on November 1999 abnormal items: Minerals $49 million, Steel
$63 million, Petroleum $49 million, Services $5 million, Net unallocated
interest ($4) million, Group and unallocated items $110 million.
(7) Includes consolidation adjustments and unallocated items.
(8) Following adoption of AASB 1036: Borrowing costs, November 1998 figures
have been restated to include ancillary borrowing costs within Net
unallocated interest. These costs were previously included in Business
results.
Quarterly comparison - November 1999 with November 1998 (1)(2)
Quarter ended 30 November 1999
Operating Revenue (3) Operating Profit
$M illion $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (4) amort'n costs
2 037 55 2 092 Minerals 563 (206) -
1 872 9 1 881 Steel 267 (105) -
888 29 917 Petroleum 518 (155) -
437 35 472 Services 32 (9) -
- 4 4 Net unallocated 4 - (187)
interest
(55) 38 (17) Group and (60) (3) -
unallocated
items(7)
4 802 170 4 972 BHP Group 1 324 (478) (187)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(5) items tax(6) after tax
Minerals 357 (99) 49 307
Steel 162 (56) 63 169
Petroleum 363 (123) 49 289
Services 23 (6) 5 22
Net unallocated (183) 45 (4) (142)
interest
Group and unallocated
items (7) (63) 26 (2) (39)
BHP Group 659 (213) 160 606
Quarter ended 30 November 1998
Operating Revenue (3) Operating Profit
$M illion $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (4) amort'n costs(8)
2 331 66 2 397 Minerals 588 (228) -
1 969 23 1 992 Steel 251 (118) -
649 8 657 Petroleum 274 (169) -
538 41 579 Services 40 (19) -
- 35 35 Net unallocated 35 - (180)
interest
(168) - (168) Group and (244) (6) -
unallocated
items(7)
4 792 173 4 965 BHP Group 944 (540) (180)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(5) items tax(6) after tax
Minerals 360 (152) - 208
Steel 133 (49) - 84
Petroleum 105 (41) - 64
Services 21 (3) - 18
Net unallocated (145) 20 - (125)
interest
Group and unallocated
items (7) (250) 87 - (163)
BHP Group 224 (138) - 86
(1) Before outside equity interests
(2) Comparative figures have been restated to reflect the transfer of internal
currency hedging results from Minerals, Steel and Petroleum to Group and
unallocated items. The results of internal currency hedging activities
eliminate within Group and unallocated items.
(3) Operating revenues do not add to the BHP Group figure due to intersegment
transactions.
(4) Result for all Businesses except Net unallocated interest is equivalent to
earnings before borrowing costs, income tax expense, depreciation and
amortisation.
(5) Result of all Businesses except Net unallocated interest is equivalent
to earnings before borrowing costs and income tax expense.
(6) Tax benefit on November 1999 abnormal items: Minerals $49 million, Steel
$63 million, Petroleum $49 million, Services $5 million, Net unallocated
interest ($4) million, Group and unallocated items ($2) million.
(7) Includes consolidation adjustments and unallocated items.
(8) Following adoption of AASB 1036: Borrowing costs, November 1998 figures
have been restated to include ancillary borrowing costs within Net
unallocated interest. These costs were previously included in Business
results.
Quarterly comparison - November 1999 with August 1999 (1)
Quarterly ended 30 November 1999
Operating Revenue (2) Operating Profit
$M illion $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (3) amort'n costs
2 037 55 2 092 Minerals 563 (206) -
1 872 9 1 881 Steel 267 (105) -
888 29 917 Petroleum 518 (155) -
437 35 472 Services 32 (9) -
- 4 4 Net unallocated 4 - (187)
interest
(55) 38 (17) Group and (60) (3) -
unallocated
items(6)
4 802 170 4 972 BHP Group 1 324 (478) (187)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(4) items tax(5) after tax
Minerals 357 (99) 49 307
Steel 162 (56) 63 169
Petroleum 363 (123) 49 289
Services 23 (6) 5 22
Net unallocated (183) 45 (4) (142)
interest
Group and unallocated
items (6) (63) 26 (2) (39)
BHP Group 659 (213) 160 606
Quarter ended 30 August 1999
Operating Revenue (2) Operating Profit
$M illion $Million
Operating
profit
before
Sales Other Total abnormal Dep' n Borrowing
Revenue items (3) amort'n costs
1 999 144 2 143 Minerals 620 (207) -
1 808 22 1 830 Steel 208 (105) -
949 211 1 160 Petroleum 421 (159) -
431 41 472 Services 44 (9) -
- 21 21 Net unallocated 21 - (168)
interest
(52) 1 (51) Group and (107) (4) -
unallocated
items(6)
4 725 440 5 165 BHP Group 1 207 (484) (168)
Operating Profit
$ Million
Operating Income Abnormal Operating
profit before tax items profit
abnormal excluding after including
items and abnormal income abnormals
income tax(4) items tax (7) after tax
Minerals 413 (138) - 275
Steel 103 (40) - 63
Petroleum 262 (92) - 170
Services 35 (12) - 23
Net unallocated (147) 33 - (114)
interest
Group and unallocated
items (6) (111) 38 112 (39)
BHP Group 555 (211) 112 456
(1) Before outside equity interests
(2) Operating revenues do not add to the BHP Group figure due to inter segment
transactions.
(3) Result for all Businesses except Net unallocated interest is equivalent to
earnings before borrowing costs, income tax expense, depreciation and
amortisation.
(4) Result for all Businesses except Net unallocated interest is equivalent to
earning before borrowing costs and income tax expense.
(5) Tax benefit on November 1999 abnormal items: Minerals $49 million, Steel
$63 million, Petroleum $49 million, Services $5 million, Net unallocated
interest ($4) million, Group and unallocated items ($2) million.
(6) Includes consolidation adjustments and unallocated items.
(7) Tax benefit on August 1999 abnormal item: $112 million.
Supplementary Information - Business Results
Half year ended
30 November 1999
Sales(1) Operating(2) Depreciation Net(3)
revenue profit & amortisation assets
Minerals
Steelmaking and Energy Materials
Iron Ore 688 340 68 1 991
Coal 1 332 398 140 1 870
Hot Briquetted Iron 36 (101) 6 1 600
Manganese(7) 1 2 - 49
Intra-divisional
Adjustment (16) (5) (1)
2 041 634 214 5 509
Non Ferrous & Industrial Materials
South America Copper 799 338 98 2 496
Pacific Copper 307 55 50 671
EKATI(TM) diamonds 174 135 20 482
Cannington silver-lead-
zinc 211 67 22 527
Other Businesses (8) 502 30 4 (625)
Intra-divisional
Adjustment - - 1
1 993 625 194 3 552
Minerals Development 4 (32) 5 280
Divisional Activities (2) (44) - (4)
4 036 1 183 413 9 337
Capital &(4) Exploration
investment (before tax)
expenditure Gross (5) Charged to
Profit(6)
Minerals
Steelmaking and Energy Materials
Iron Ore 11
Coal 41
Hot Briquetted Iron 111
Manganese(7) -
Intra-divisional
Adjustment
163
Non Ferrous & Industrial Materials
South America Copper 21
Pacific Copper -
EKATI(TM) diamonds 1
Cannington silver-lead-
Zinc 4
Other Businesses (8) 20
Intra-divisional
Adjustment
46
Minerals Development 2
Divisional Activities (3)
208 30 25
Sales(1) Operating(2) Depreciation Net(3)
revenue profit & amortisation assets
Steel
Flat Products 1 117 145 80 1 975
Coated Products 1 695 217 63 2 140
Long Products 851 50 39 1 496
Building & Industrial
Products 1 166 86 27 1 138
Intra-divisional
Adjustment (1 149) (5) (62)
Divisional Activities - (18) 1 (5)
3 680 475 210 6 682
Capital &(4) Exploration
investment (before tax)
expenditure Gross (5) Charged to
Profit(6)
Steel
Flat Products 24
Coated Products 10
Long Products 19
Building & Industrial
Products 7
Intra-divisional
Adjustment
Divisional Activites -
60 - -
Sales(1) Operating(2) Depreciation Net(3)
revenue profit & amortisation assets
Petroleum(9)
Bass Strait 786 457 92 866
North West Shelf 360 278 42 1 216
Liverpool Bay 133 127 76 445
Other Businesses 500 200 103 1 482
Marketing activities 524 (2) 1 15
Intra-divisional
Adjustment (342) -
Divisional activities (124) (121) - 7
1 837 939 314 4 031
Capital &(4) Exploration
investment (before tax)
expenditure Gross (5) Charged to
Profit(6)
Petroleum(9)
Bass Strait 96
North West Shelf 31
Liverpool Bay 11
Other Businesses 94
Marketing activities -
Intra-divisional
Adjustment
Divisional activities - 100 79
232 100 79
Sales(1) Operating(2) Depreciation Net(3)
revenue profit & amortisation assets
Services 868 76 18 121
Net Unallocated Interest - 25 - (9 679)
Group and unallocated
Items (107) (167) 7 22
BHP Group 9 527 2 531 962 10 514
Capital &(4) Exploration
investment (before tax)
expenditure Gross (5) Charged to
Profit(6)
Services 14 - -
Net Unallocated Interest - - -
Group and unallocated
Items 14 - -
BHP Group 528 130 104
(1) Sales revenues do not add to the BHP Group figure due to intersegment
transactions.
(2) Result for all Businesses except Net unallocated interest is equivalent
to earnings before borrowing costs, income tax expense, depreciation and
amortisation
(3) Provisional balances
(4) Excludes capitalised interest and capitalised exploration.
(5) Includes capitalised exploration: Minerals $5 million and Petroleum
$3 million
(6) Includes $11 million Petroleum exploration expenditure previously
capitalised, now written off.
(7) Principal manganese assets were sold in December 1998.
(8) Includes North America Copper mining and smelting operations which ceased
during the August quarter, Been up mineral sands operation which closed
in April 1999 and Hartley platinum mine where operations have been
suspended pending conditional sale.
(9) Petroleum sales revenue includes: Crude oil $1 183 million, Natural gas
$172 million, LNG $161 million, LPG $128 million and Other $193 million.
Supplementary Information - Business Results
Half year ended
30 November 1998 (1) Sales (2) Operating (3) Depreciation Net
revenue profit before & amortisation assets
abnormal
items
Minerals
Steelmaking and Energy
Materials
Iron Ore 903 490 72 1,709
Coal 1,689 582 143 1,989
Hot Briquetted Iron(6) - 25 1 1,912
Manganese(7) 238 66 10 331
Intra-divisional
Adjustments - - -
------ ------ ------ ------
2,830 1,163 226 5,941
Non Ferrous & Industrial Materials
South American Copper 761 256 79 2,520
Pacific Copper 378 115 54 773
North America Copper(8) 645 33 56 1,143
EKATI TM diamonds(9) - 7 - 572
Cannington silver-lead-
Zinc 168 32 15 549
Other Businesses(10) 37 (55) 13 474
Intra-divisional
Adjustment (17) 10 (5)
------ ------ ------ -------
1,972 398 217 6,026
Minerals Development 20 (87) 7 324
Divisional Activities (7) (42) - 73
------ ------ ------ ------
4,815 1,432 450 12,364
Steel
Flat Products 1,198 155 79 2,274
Coated Products 1,744 206 72 2,399
Long Products 1,022 106 52 1,378
Building & Industrial
Products 1,325 103 30 1,361
Intra-divisional
Adjustment (1,225) 10 (67)
Divisional activities - (22) 1 58
------ ------ ------ ------
4,064 558 234 7,403
Petroleum(11)
Bass Strait 441 235 67 812
North West Shelf 307 226 48 1,223
Liverpool Bay 180 126 92 1,387
Other Businesses 415 114 135 2,035
Marketing activities 144 (11) 1 14
Intra-divisional
Adjustments (41) -
Divisional activities 3 (19) - 31
------ ------ ------ ------
1,449 671 343 5,502
Services 1,090 133 38 497
Net Unallocated Interest - 75 - (13,064)
Group and unallocated
Items (379) (567) 10 38
BHP Group 9,954 2,302 1,075 12,740
Half year ended
30 November 1998 (1) Capital & (4) Exploration
investment (before tax)
expenditure Gross (5) Charged
to
profit
Minerals
Steelmaking and Energy
Materials
Iron Ore 42
Coal 57
Hot Briquetted Iron(6) 325
Manganese(7) 2
Intra-divisional
Adjustments
------
426
Non Ferrous & Industrial Materials
South American Copper 229
Pacific Copper 15
North America Copper(8) 58
EKATI TM diamonds(9) 42
Cannington silver-lead-
Zinc 9
Other Businesses(10) 10
Intra-divisional
Adjustment
------
363
Minerals Development 4
Divisional Activities 2
------
795 115 97
Steel
Flat Products 81
Coated Products 32
Long Products 56
Building & Industrial
Products 19
Intra-divisional
Adjustment
Divisional activities -
------
188 - -
Petroleum(11)
Bass Strait 127
North West Shelf 47
Liverpool Bay 45
Other Businesses 189
Marketing activities -
Intra-divisional
Adjustments
Divisional activities - 140 79
------ ------ ------
408 140 79
Services 10 - -
Net Unallocated Interest - - -
Group and unallocated
Items - - -
BHP Group 1,401 255 176
(1) These figures have been restated to reflect the transfer of internal
currency hedging results from Minerals, Steel and Petroleum to Group and
unallocated items. The results of internal currency hedging activities
eliminate within Group and unallocated items.
(2) Sales revenues do not add to the BHP Group figure due to intersegment
transactions.
(3) Result for all Businesses except Net unallocated interest is equivalent to
earnings before borrowing costs, income tax expense, depreciation and
amortisation.
(4) Excludes capitalised interest and capitalised exploration.
(5) Includes capitalised exploration: Minerals $18 million and Petroleum $61
million.
(6) Includes profit on sale of Karratha to Port Hedland natural gas pipeline.
(7) Principal manganese assets were sold in December 1998.
(8) North America Copper mining and smelting operations ceased during the August
1999 quarter.
(9) Production at EKATI TM diamond mine commenced in October 1998.
(10) Includes Beenup mineral sands operation, which was closed in April 1999,
and Hartley Platinum mine where operations have been suspended pending
conditional sale.
(11) Petroleum sales revenue includes: Crude oil $729 million. Natural gas $269
million, LNG $167 million, LPG$87 million and Other $197 million.
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