| Why BHP’s Operating Income Fell in Fiscal 2015 | |
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BHP's Fiscal 2015 Results: Is Everything Going According to Plan? (Continued from Prior Part) Operating income
BHP Billiton’s (BHP) (BBL) underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) was $21.9 billion for fiscal 2015. This is a fall of 28% year-over-year (or YOY). Operating income also fell 46% YoY in fiscal 2015. In this article, we’ll see the reasons for the declining EBITDA and operating income.
BHP’s fall in operating income
- Lower realized prices were the main culprit behind BHP’s fall in operating income. Lower prices reduced earnings by $16.4 billion. They also offset the impact of productivity gains BHP achieved during the year.
- A bulk of the drop in operating income, or EBIT (earning before interest and taxes) was due to the fall in the average realized iron ore prices. They fell 41% YoY in fiscal 2015. Of a total fall of $16.4 billion, $9.5 billion, or 58%, was due to lower iron ore prices.
- Weaker realized prices for petroleum, copper, and coal dropped EBIT by $4.2 billion, $1.6 billion, and $1.1 billion, respectively.
Volume and productivity led gain
- On the other hand, volume growth delivered through productivity enhancements and ramp-ups led to an increase in EBIT by $3 billion. Western Australia iron ore (or WAIO) was the major driver behind improved volume performance.
- Doubling of liquids production from Black Hawk and Permian was the other significant driver behind volume-related increase in EBIT.
- Reduction in labor, contractor, and maintenance costs also led to an increase in EBIT by $1.5 billion during fiscal 2015.
The fall in operating income is not limited to just BHP. Other miners, including Vale SA (VALE), Rio Tinto (RIO), Cliffs Natural Resources (CLF), and Freeport-McMoRan (FCX) also reported a fall in their respective incomes for 2Q15. Iron ore, petroleum, coal, and copper prices are going through a rough phase, impacted by oversupply amid slowing growth concerns in China and elsewhere. The SPDR S&P Metals and Mining ETF (XME) invests in diversified metals and mining space. FCX forms 3% of XME’s holdings.
In the next article, we’ll look at the volumes for iron ore. Iron ore contributes to the majority of BHP’s earnings. It contributed 40% to BHP’s fiscal 2015 EBITDA.
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VanEck Vectors Global Alternative Energy ETF
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière de cuivre et d'or basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice de cuivre, d'or, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 2,1 milliards (1,9 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 , et son plus haut niveau récent le 20 septembre 2024 à 44,53 . Freeport McMoran possède 47 442 200 actions en circulation. |