BHP share price rises 1.42% following June activities report

Following the release of BHP’s fourth quarter activities report, analysts from the Royal Bank of Canada continue to prefer BHP shares over Rio Tinto.

BHP Billiton Ltd, the A$199 billion global mining company released its Q4 activities report this morning.

Investors responded positively to the report, with BHP’s share price rising as much as 1.42% during morning trade.

Here’s everything you need to know from BHP’s Q4 activities report:

Production increases across the board

Between March and June, BHP saw some healthy increases in production across nickel, coal and iron ore. Overall, production rose 11% in the June quarter.

Nickel production rose 49% from March to June, as output from the Kalgoorlie smelter ramped up following the completion of vital repairs.

Improved mining performance also saw metallurgical coal production increase 20%, with the June quarter witnessing significantly better weather conditions.

Iron ore production was up 12%, as BHP’s Western Australian Iron Ore (WAIO) processing hub returned to full capacity after being negatively impacted by cyclones in March.

Lastly, petroleum and copper production posted more modest increases in the June quarter, up 3% and 6% respectively.

BHP's major projects tracking well

As it stands, the company has five major projects under development, spanning petroleum, copper, iron ore and potash.

Promising progress was also made on the company’s North West Shelf Greater Western Flank-B project, which managed to achieve first production ‘ahead of schedule and under budget’.

Finally, a focus on expanding copper operations was also highlighted in this morning’s Q4 activity report, with greenfield expansion across 'Chile, Ecuador, Peru, Canada, South Australia and the South-West United States' a highlight.

Long-term value in focus

Speaking of the company’s yearly performance, BHP’s CEO, Andrew Mackenzie, noted that:

‘We finished the 2019 financial year with an 11 per cent increase in quarterly production, driven by strong operational performances across our portfolio, including annual production records at a number of our petroleum, copper, iron ore and metallurgical coal operations.’

BHP's CEO also pointed out that strong company performance puts us in a position to deliver higher volumes in the 2020 financial year. BHP’s suite of attractive options, together with our culture and transformation programs, will grow returns and create long-term financial and social value.”

Already BHP has delivered good returns to investors this year, with the company's share price rising 22.2% YTD.

Analysts weigh in on BHP’s Q4 update

It was not just BHP’s leadership that was happy with the company’s fourth quarter performance. A research note from the Royal Bank of Canada released this morning also painted a positive picture of the June quarter results.

According to the research note, BHP Billiton Ltd mildly exceeded most of the bank's production estimates, while also meeting production estimates across petroleum, copper and iron ore.

Maybe most positively, the bank noted that ‘we continue to prefer BHP over its key Australian peer RIO given relative valuation.’ Additionally, ‘BHP’s more diverse portfolio mitigates the potential impact of falling iron ore prices,’ said the bank.

Lastly, the Royal Bank of Canada flagged the potential of a special $0.60 per share dividend following BHP's full year results in August.

The bank currently has a price target of A$43.00 on BHP's shares.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.