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19/08/2014

VSA Capital’s Renken on BHP Billiton results and spin-off plans

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Market: LSE, ASX
Sector: General Mining
EPIC: BLT
Latest Price: 1,815.50p  (-0.18% Descending)
52-week High: 2,102.00p
52-week Low: 1,715.00p
Market Cap: 38,344.66M
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BHP Billiton
www.bhpbilliton.com
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BHP Billiton is a global leader in the resources industry. Formed from a merger between BHP and Billiton, the company is a leader in the extraction and sales of most natural resources, and is particularily strong in Iron Ore, Coking and Thermal Coal, Copper, Zinc, Oil & Gas, Diamonds and most materials key to the production of steel.

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BHP Billiton: City broker awaits project news amid falling prices and rising costs

August 20 2012, 4:40pm The broker expects Billiton’s iron ore business to have improved on last year, while base metals and coal businesses are expected to have been weaker.

With BHP Billiton’s (LON:BLT) full year results likely to show falling prices and rising costs, just like its mining peers, analysts at RBC Capital says it is looking for signs whether the FTSE’s largest miner may drop shelve new projects.

“Having already addressed the market’s concerns over writedowns of its shale business, focus will now be turned to BHP’s capex plans and whether any of its large projects will be deferred in light of weak market conditions,” RBC analyst Des Kilalea said in a note.

In particular he says he's looking for comments about ‘mega projects’ in Billiton’s pipeline like the Outer Harbour, Olympic Dam and Jansen Potash, as well as plans for a disposal of Billiton’s diamond business.

That said, Kilalea reckons Billiton continues to offer an attractive yield and diversification in a tough market. As such the analyst repeated an ‘outperform’ rating and a £23.00 price target for the heavyweight mining stock.

RBC is forecasting revenues of US$70.8 billion for the twelve month period, with earnings of US$32.6 billion – both forecasts are slightly below consensus.

The broker expects Billiton’s iron ore business to have improved on last year, while base metals and coal businesses are expected to have been weaker.

Billiton’s results are due for release on Wednesday 22 August.

 

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