Prelim Results Y/E 30 June 01
BHP Billiton Limited
20 August 2001
BHP Billiton Limited is issuing this announcement to fulfil disclosure
obligations arising from its secondary listing on the London Stock Exchange.
The text of this announcement is identical to that issued by BHP Billiton Plc
earlier.
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2001
PART A: BHP BILLITON NEWS RELEASE
________________________________________________________________________________
The attached material contains the preliminary (unaudited) results for the
year ended 30 June 2001 for BHP Billiton.
Given the date on which the merger between BHP and Billiton was completed (29
June 2001) and the differing reporting requirements in Australia and the UK,
the financial information for this first year has been prepared in three ways:
+ for the BHP Billiton Limited Group as a stand alone group
+ for the BHP Billiton Plc Group as if a stand alone group; and
+ for the BHP Billiton Limited and BHP Billiton Plc groups combined.
This pack of material contains 5 parts:
Part A News Release (containing CEO and Managing Director's comments).
Part B Explanation of the structure of the Preliminary
Report including summary of key financial information.
Part C Results for the BHP Billiton Limited and BHP
Billiton Plc groups combined.
Prepared using the merger method of accounting as though BHP
Billiton Limited and BHP Billiton Plc had been merged for the
whole of the period.
Part D Results for the BHP Billiton Limited Group.
Prepared for the BHP Billiton Limited Group as a stand
alone group and compares the results with the previous year.
This is the release that shareholders of BHP Limited will be
familiar with from prior years.
Part E Pro forma results for the BHP Billiton Plc Group.
Prepared for the BHP Billiton Plc Group as if it had been
a stand alone group.
Users are encouraged to read Part B, which provides further detail on the
method of reporting that has been adopted.
Karen J Wood
Company Secretary
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number
Registered in Australia 3196209
Registered Office: 600 Bourke Street Registered in England and Wales
Melbourne Victoria 3000 Registered Office: 1-3 Strand London
Telephone (61 3) 9609 3333 WC2N 5HA United Kingdom
Facsimile(61 3) 9609 3015 Telephone (44 20) 7747 3800
Facsimile(44 20) 7747 3900
The BHP Billiton Group is headquartered in Australia
News Release
Release Time: IMMEDIATE
Date: 20 August 2001
Number: 10/01
BHP BILLITON ANNOUNCES RECORD COMBINED RESULT OF US$2.2 BILLION
The BHP Billiton Group (BHP Billiton) today announced a record combined
attributable profit of US$2,189 million, excluding exceptional items, for the
12 months to 30 June 2001. Earnings per share, excluding exceptional items, for
the year was US$0.37, compared with US$0.30 for the previous year.
The result represents the combined attributable profit of BHP Billiton Limited
and BHP Billiton Plc and is an increase of US$446 million, or 26 per cent,
compared with the 2000 financial year combined results.
BHP Billiton CEO and Managing Director Paul Anderson said: 'This is an
outstanding result that demonstrates BHP Billiton's financial strength,
earnings capability across a wide range of world-class businesses and
underlying balance sheet strength.'
Including exceptional items, the result for the 12 months ended 30 June 2001
was US$1,529 million, an improvement of US$23 million compared with the 2000
financial year. The result includes transaction costs associated with the
merger of US$92 million, a US$410 million charge to profit related to HBI
Venezuela and a US$148 million charge to profit for the write-off of BHP
Billiton's share of the net assets in the Ok Tedi copper project (Papua New
Guinea).
Mr Anderson said both sides of the BHP Billiton Group had delivered record
financial results (on a pre-merger basis) and made significant progress in
delivering value-adding growth.
BHP Billiton Limited
'BHP Billiton Limited's record result of A$2 billion was achieved despite
charges to profit associated with our decision to cease further investment in
HBI Venezuela and the write-down at Ok Tedi. Attributable net profit was up 27
per cent on last year, which was also a record result.
'We also improved the fundamental financial performance of the Company and
excellent progress was made in reinvigorating the quality of the portfolio.
The fix-up, clean-up stage was all but complete last year and we made a number
of hard portfolio decisions.
'In addition, we successfully completed two other major transactions; the
spin-out of OneSteel and the joint acquisition of QCT Resources with
Mitsubishi - and subsequent equalisation of ownership interests in the
metallurgical coal business.
'Quite apart from the merger with Billiton, we committed to a number of
important new growth projects including Escondida Phase IV (Copper, Chile),
North West Shelf Train 4 (LNG, Australia), the Ohanet (Gas/Liquids)
development in Algeria, San Juan underground (Coal, United States), Tintaya
Oxide (Copper, Peru), the Blackwater mine integration (Coal, Australia), and
Laminaria Phase II (Oil, Australia). Total commitment for these projects was
about A$3 billion (US$1.5 billion). Over two thirds of the funds committed
were to extensions of existing projects, thereby providing low-risk, higher
value incremental growth.
'Operationally, we achieved a number of important milestones during the year.
Production and shipment records were set in our iron ore business,
metallurgical coal production was significantly higher during the period, we
commenced contractual gas sales from the Extended Well Test on the Zamzama gas
field (Pakistan), and the Typhoon oil field development in the deepwater Gulf
of Mexico was brought into production less than 18 months from project
sanctioning and under budget.'
BHP Billiton Plc
Mr Anderson said BHP Billiton Plc also had an outstanding year in financial,
operational and growth terms. Excluding exceptional items, operating profit
increased 33 per cent to a record US$1.12 billion and attributable profit
increased 22 per cent to a record US$693 million.
'BHP Billiton Plc continued its strategy of aggressive growth during the year,
with the US$1.2 billion acquisition of Rio Algom and a 56 per cent increase in
its ownership of Worsley Alumina (Western Australia), consolidating BHP
Billiton Plc's global position at the bottom of the alumina cost curve, while
securing feedstock for the Mozal (Aluminium, Mozambique) and Hillside
(Aluminium, South Africa) operations.
'During the year BHP Billiton Plc also successfully completed construction and
commissioning at the Mozal aluminium smelter, the Cerro Matoso (Colombia)
nickel expansion, and achieved mechanical completion at the Antamina copper
project (Peru) and the Worsley refinery expansion. All were completed ahead of
schedule and under budget, with the production and revenue stream now flowing
through to BHP Billiton shareholders.
'In addition, BHP Billiton Plc established a substantial production base in
energy coal though the acquisition of equity positions in Carbones del
Cerrejon and Cerrejon Zona Norte (Colombia), providing the Group with access
to energy coal resources on three continents; Australia, South America and
South Africa.
'BHP Billiton Plc continued to improve its operational efficiency during the
year. Excluding the beneficial impact of exchange rates and commodity
price-linked cost movements, unit operating costs were reduced by two per cent
in real terms,' Mr Anderson said.
Group Result
'Individually both companies have a great story - put them together and it's
even better. We set out to create an industry leader. A new Group that would
have the strength of a diversified portfolio of outstanding assets, tremendous
financial flexibility and enhanced opportunities for growth, through a
powerful inventory of projects.
'That was the vision. This vision is given real substance in the inaugural
result.
'On a pre-exceptionals basis, the BHP Billiton Group generated EBITDA of
US$5.3 billion. In balance sheet terms, gearing was 38 per cent the and
pre-exceptional EBITDA interest cover ratio was 11.1 times. Even with over
US$1 billion in exceptional items, the EBITDA interest cover ratio was 8.8
times.
'The Group spent US$6 billion on acquisitions and new project developments
during the last financial year. The full financial benefits of this investment
will be realised by shareholders over the coming years.
'The BHP Billiton Group has an impressive base of cash generating assets; with
a long pipeline of growth projects and a sufficiently flexible and strong
balance sheet to fund both internally generated and other identified
opportunities.'
Integration
Commenting on the integration, Mr Anderson said progress had exceeded
expectations.
'The planning and execution of the integration has been thoroughly planned and
executed in a professional way. Our new management teams and structure have
been in place since day one of the merger completion, enabling us to maintain
the momentum that has been such a key driver of the performance over the past
year.
'Since the merger was announced, we have committed to the Mozal 2 expansion
and to the development of the Mount Arthur North energy coal mine (Australia).
We have also completed the acquisition of Dia Met (Diamonds, Canada), finalised
the Queensland metallurgical coal equalisation and announced the sell-down of
our interest in the Columbus Stainless Steel Joint Venture (South Africa).
'Probably the most powerful achievement of the integration teams was to
initiate new and innovative thinking about how we create value across our
businesses. The merger presented a unique opportunity to do this; it delivered
a distinctive new combination of assets, with a global footprint in virtually
every significant resource commodity, across the world's key mining regions
and across the key customer bases for those products.'
Mr Anderson said strong EBIT contributions were recorded from the Customer
Sector Groups (excluding exceptional items), with Carbon Steel Materials (up
US$356 million or 66 per cent), Petroleum (up US$346 million or 33 per cent)
and Energy Coal (up US$245 million or179 per cent) being the standout
performers.
'The Customer Sector Groups (CSGs) will have significant autonomy to manage
and grow their businesses within a centralised capital deployment discipline.
They will be as outwardly focussed on their markets and customers, as on the
efficient management of the assets themselves.
'Each of the CSGs is currently reviewing its portfolio, developing its
strategy and business plan, and establishing detailed plans to deliver the
merger benefits.'
Steel Public Listing
The public listing of BHP Billiton Limited's remaining Steel business is on
track for completion by the end of FY2002. Progress to date has been
significant and includes the agreement of key objectives and establishment of
project teams. A selection process is also currently underway for the Chairman
and a number of key senior appointments, including the Board and management,
are anticipated in coming months.
Outlook
Commenting on the global commodity outlook, Mr Anderson said: 'While we may be
less than happy with the current prices of copper or nickel, we take some
comfort that our overall portfolio provides diversification markedly superior
to most companies in the resources sector.
'This diversification enables us to have a much stronger and more stable cash
flow stream; to be able to be more opportunistic during stages of the market
cycle where opportunities are appropriately valued; and to have a level of
dispassion about the longevity of individual assets in the portfolio which a
smaller player would find difficult.
'We have a powerful combination of exchange traded commodities (aluminium,
copper and nickel) and, just as importantly, a broad spread of negotiated,
non-terminal commodities such as metallurgical and energy coal, manganese and
iron ore. Our positions in titanium minerals and diamonds, while not large
businesses in their own right, provide us with further diversification.
'There are also other factors which differentiate the BHP Billiton portfolio.
Of particular significance is the inclusion of oil and gas, which makes the
Group unique from its diversified peers.
'We have clearly stated that the Petroleum business is a key part of the
portfolio. Its high quality assets, strong financial performance, significant
earnings contribution and growth potential make Petroleum an important part of
the BHP Billiton Group.
'In addition, we have flagged our strategic intent to develop an energy
capability, encompassing our energy coal, liquids and potentially expanded LNG
presence.'
Future Activities
Mr Anderson said: 'In this current financial year you will see BHP Billiton
gather even greater momentum; an unfolding of our strategic direction;
commitment to further growth projects; and a willingness and capability to
participate in industry consolidation as appropriate value opportunities present
themselves.
'The momentum of the two teams and a shared vision of value creation brought
us together in the merger. Now the combined BHP Billiton Group is far greater
than the sum of its previous parts and we look forward to delivering continued
outstanding performance.'
****
BHP Billiton is a world leading diversified resources Group and creates value
through the discovery, development and conversion of natural resources and the
provision of innovative customer and market-focused solutions. The Group is a
Dual Listed Company, comprised of BHP Billiton Limited and BHP Billiton Plc,
and is headquartered in Australia.
Further information about the BHP Billiton Group can be found at: http://
www.bhpbilliton.com or contact:
Australia Dr. Robert Porter, Investor United Kingdom Marc Gonsalves,
Relations Tel: + 61 3 9609 3540 Investor Relations &
Mobile: +61 419 587 456 Communications
email: Robert.Porter@bhpbilliton.com Tel: +44 20 7747 3956 Mobile:
+44 7768 264 950
email:Marc.Gonsalves@bhpbilliton.com
Mandy Frostick, Media Relations South Africa Michael Campbell,
Tel: +61 3 9609 4157 Mobile: +61 419 546 245 Investor & Media Relations Tel:
email: Mandy.J.Frostick@bhpbilliton.com +27 11 376 3360
Mobile: +27 82 458 2587
email:Michael.J.Campbell@bhpbilliton.com
SmithField Financial London United States Francis
Rupert Trefgarne McAllister, Investor Relations
John Antcliffe Tel: +1 713 961 8625
Tel: +44 207 360 4900 Mobile: +1 713 480 3699
email:Francis.R.McAllister@bhpbilliton.com
BHP BILLITON
PRELIMINARY RESULTS
FOR THE YEAR ENDED 30 JUNE 2001
PART B
SUMMARY OF RESULTS:
Explanation of Structure of the Preliminary Results Report
Summary Key Financial Information
BHP BILLITON
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2001
PART B
BHP BILLITON GROUP RESULTS
Explanation of the structure of the Preliminary Results Report
On 29 June 2001, BHP Billiton Ltd (previously known as BHP Ltd) and BHP
Billiton Plc (previously known as Billiton Plc) entered into a dual listed
companies ('DLC') merger. This was effected by contractual arrangements
between the companies and amendments to their constitutional documents.
The effect of the DLC merger is that BHP Billiton Ltd and its subsidiaries and
BHP Billiton Plc and its subsidiaries operate together as a single economic
entity, with each company's shareholders having common economic interests in
both groups. However, the DLC merger did not involve the change of legal
ownership of any assets of BHP Billiton Ltd or BHP Billiton Plc or any change
of ownership of any existing shares or securities of BHP Billiton Ltd or BHP
Billiton Plc and each continue as separate, publicly quoted companies bound by
reporting and other regulations in Australia and the UK respectively.
Throughout the preliminary results report, 'BHP Billiton Group', 'BHP
Billiton' or 'Group' refers to the combined group comprising BHP Billiton
Limited and its subsidiaries, together with BHP Billiton Plc and its
subsidiaries.
Since reporting requirements differ in the Australian and UK jurisdictions and
in view of the proximity of the implementation of the DLC merger to the
financial year end, the financial information in this preliminary
announcement, which is unaudited, is presented on three different bases as
follows.
* Part C: BHP Billiton Group Results
In this Part of the preliminary announcement, the financial
information has been prepared under UK GAAP and is presented in US
dollars.
It is prepared as though the BHP Billiton Ltd Group and the BHP
Billiton Plc Group have always been combined using the merger method of
accounting.
This is the basis of preparation that will be used in preparing the
consolidated accounts of BHP Billiton Plc to be included in its Annual
Report.
* Part D: BHP Billiton Ltd Group Results
In this Part of the preliminary announcement, the financial
information has been prepared under Australian GAAP and is presented in
Australian dollars. It is presented in 2001 on the basis that the
consummation of the DLC merger on 29 June 2001 had no effect on the
financial results of the BHP Billiton Ltd Group except that merger related
costs have been recognised and certain accounting policies have changed to
align where possible with the policies of BHP Billiton Plc.
The financial information does not include the results, assets and
liabilities or cash flows of the BHP Billiton Plc Group.
This is consistent with the basis of preparation of the consolidated
financial statements of BHP Billiton Ltd to be reported in its Annual
Report. In addition, the financial statements will include this year a
note setting out details of the DLC merger and a pro forma Statement of
Financial Position combining those of the BHP Billiton Ltd and BHP
Billiton Plc Groups, each being prepared in accordance with Australian
GAAP.
* Part E: BHP Billiton Plc Group Pro forma Results
In this Part of the preliminary announcement, the financial
information has been prepared under UK GAAP (except that it does not
reflect the DLC merger) and is presented in US dollars. It is presented on
the basis that the consummation of the DLC merger had no effect on the
financial information of the BHP Billiton Plc Group for 2001 except that
merger related costs have been recognised and certain accounting policies
have changed to align where possible with the policies of BHP Billiton
Ltd.
The financial information does not include the results, assets and
liabilities or cash flows of the BHP Billiton Limited Group.
This information is pro forma information and will not appear in the
statutory accounts of any entity. It is provided to enable users to
understand the results of the BHP Billiton Plc Group as they have
previously been presented solely in view of the proximity of the
implementation of the DLC merger to the financial year end.
This is the last time that financial information will be presented
for the BHP Billiton Plc Group standalone.
Summary Key Financial Information
BHP Billiton Group Results
US$m 2001 2000 Change %
Turnover 19,079 18,402 3.7
EBITDA
- excluding exceptional items 5,299 4,775 11.0
- including exceptional items 4,211 4,015 4.9
EBIT
- excluding exceptional items 3,627 3,027 19.8
- including exceptional items 2,539 2,267 12.0
Attributable profit
- excluding exceptional items 2,189 1,743 25.6
- including exceptional items 1,529 1,506 1.5
Basic earnings per share (cents)
- excluding exceptional items 36.8 30.4 21.1
- including exceptional items 25.7 26.3 (2.3)
Net operating assets 21,468 19,711 8.9
BHP Billiton Limited Group Results
A$m 2001 2000 Change %
Sales revenue 20,698 19,872 4.2
EBITDA 5,530 4,404 25.6
EBIT 2,575 1,600 60.9
Attributable net profit 2,007 1,581 26.9
Basic earnings per share (cents) 54.4 43.3 25.6
(adjusted for bonus issue)
Net assets 11,248 11,005 2.2
BHP Billiton Plc Group Pro Forma Results
US$m 2001 2000 Change %
Turnover 7,333 5,550 32.1
EBITDA
- excluding exceptional items 1,646 1,236 33.2
- including exceptional items 1,236 18.4
1,463
EBIT
- excluding exceptional items 1,138 851 33.7
- including exceptional items 955 851
12.2
Attributable profit
- excluding exceptional items 693 566 22.4
- including exceptional items 566 -
565
Basic earnings per share (cents)
- excluding exceptional items 30.7 27.3 12.5
- including exceptional items 25.1 27.3 (8.1)
Net operating assets 11,263 7,169 57.1
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