Sula Iron & Gold (LON:SULA)
Sula Iron & Gold has announced the issue of 9.375mn ordinary shares at an exercise price of 0.16p following the exercise of warrants. The gross proceeds raised amounted to £15k. Share capital is now 2,086mn ordinary shares.
We reiterate our Buy Recommendation and target price of 1.7p/sh.
Following strong production results Anglo American has announced strong full year results. Group revenue of US$23.1bn was marginally higher at 1%. However, margins were significantly stronger owing to cost cutting and currency depreciation and EBITDA of US$6.1bn was up 25% YoY. The key segments which drove the improvement were De Beers, iron ore and coal although this was offset by modest declines in platinum and copper. Net income of US$1.6bn reversed a loss of US$5.6bn in the prior year.
AAL opted not to pay a dividend in 2016. The net debt target of US$10bn was well beaten, however, as the strong earnings combined with asset sales (US$1.8bn) and capex reduction (-37% YoY to US$2.5bn) resulted in a 34% YoY decline in net debt to US$8.5bn. AAL is targeting a further US$1bn in cost savings and is aiming to resume dividend payments by the end of 2017.
BHP Billiton (LON:BLT)
BHP Billiton has released robust interim results as the strong recovery in bulk and base metal commodity prices offset production weakness in petroleum, copper and thermal coal. Group revenues for H1 FY 2017 were up 20% YoY to US$15.7bn driven primarily by the recovery in prices in iron ore, copper and coal. Underlying EBITDA of US$9.9bn was up 65% primarily as a result of the strong top line. EBITDA in the iron ore division was up from US$2.8bn to US$4.2bn while in copper EBITDA was up from US$0.8bn to US$1.7bn and US$0.2m to US$2bn in coal.
Net debt decreased from US$25.9bn to US$20bn owing to a 38% reduction in capex to US$2.7bn combined with the significant recovery in earnings. The final dividend of US$0.3/sh. meant that the full year dividend of US$0.4/sh. was up 150% YoY.
BLT has announced an increase in exploration spending for FY 2017 and 2018 by around US$400m.