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BHP hikes dividend as US tax reforms push H1'18 net profit down 37% YOY

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BHP hikes dividend as US tax reforms push H1'18 net profit down 37% YOY

TOP NEWS

BHP hikes dividend as US tax reforms push H1'18 net profit down 37% YOY

BHP Billiton Group hiked its interim dividend to 55 U.S. cents per share, compared to 40 cents per share a year ago, despite a 37% drop in its net profit. The company posted a profit attributable to shareholders in the first half of the year of US$2.02 billion, or 37.7 cents per share, down from US$3.20 billion, or 60 cents per share, recorded a year ago. The results included after tax exceptional losses totaling US$2.04 billion, including US$1.83 billion from U.S. tax reforms and US$210 million related to the dam failure in November 2015 at the Samarco iron ore mine in Brazil.

Report: Rusal taps first woman CEO to replace Oleg Deripaska

United Co. Rusal Plc is set to name CFO Alexandra Bouriko as CEO, the first time that the Russian commodity producer will name a woman to the post, Bloomberg News reported, citing people familiar with the matter. Bouriko was reported by Russian media to replace Russian billionaire Oleg Deripaska who is stepping down as Rusal president. Rusal, however, said that its board of directors has not considered or discussed any such issue, and no executive changes have been made.

Novolipetsk Steel Q4'17 net income improves 39% YOY to US$428M

PJSC Novolipetsk Steel's net income in the fourth quarter of 2017 increased 39% year over year to US$428 million, from US$308 million in the same period of the previous year, as revenue for the quarter grew 43% on a yearly basis to US$2.82 billion. For full year 2017, the group's net income rose 55% to US$1.45 billion, from US$935 million in 2016, with revenue rising 32% to US$10.07 billion.

DIVERSIFIED

* S&P Global Market Intelligence's Metals and Mining Research found that the number and nominal value of initial resources were both down in 2017, after an uptick in 2016. The number of initial resources reported at new projects and at new deposits within existing projects announced by junior and intermediate companies slipped to 53 from 55 in the previous year. More significantly, the nominal value of all metals contained in new resources fell by nearly 57% — to just US$46 billion from US$106 billion in 2016.

BASE METALS

* Russian billionaires Oleg Deripaska and Vladimir Potanin are currently locked in a legal standoff over the controlling stake in PJSC Norilsk Nickel Co. Potanin, who holds a 30% stake in Norilsk Nickel, offered to purchase another 5% stake in the company from Roman Abramovich, prompting immediate protest from Oleg Deripaska. Deripaska, who owns a 28% share in Norilsk, moved to block the sale with an injunction in a London court on Feb. 16, causing shares in both Rusal and Norilsk Nickel to drop. Kirill Chuyko, head of equity research and metals and mining at BCS Global Markets, told S&P Global Market Intelligence that the market's reaction to the legal dispute was overblown.

* The recent price rally seen across base metals has been fueled by the depreciating U.S. dollar — exacerbated by fears over U.S. inflation and the recent stock market rout. Fundamentals have largely taken a back seat in proceedings, including in the zinc market. The U.S. dollar trade-weighted index fell 5.8% from its December 2017 closing high of 94.1 — to below 90.0 at the end of January and into February — helping wider commodity prices to strengthen, including zinc which has notably closed above US$3,500/t in February, when the U.S. dollar has been at its weakest since the turn of the year, according to the Metals and Mining Research team of S&P Global Market Intelligence.

* Vedanta Resources Plc may fast track the expansion of its zinc projects in Africa to take advantage of the commodity's rally to its highest price since 2007, Reuters reported, citing the company's Zinc International unit CEO Deshnee Naidoo.

* Small-scale cobalt production in the Democratic Republic of the Congo, which accounts for about a quarter of the country's production of the commodity, have been found to lack safety measures and allegedly employ child laborers, Bloomberg News reported.

PRECIOUS METALS

* AngloGold Ashanti Ltd.'s loss attributable to shareholders for the fourth quarter of 2017 widened to US$73 million, or 18 U.S. cents per share, from a loss of US$7 million, or 2 cents per share, in the year-ago quarter. The company sold about 1 million ounces of gold at an average price of US$1,276 per ounce in the quarter, compared to 945,000 ounces at US$1,216 per ounce a year ago. Meanwhile, AngloGold Ashanti declared a full-year dividend of about 6 U.S. cents per share.

* Northern Star Resources Ltd.'s net profit after tax slid 7% year over year to A$79.1 million in the first half of fiscal 2018, attributing the decline to reduced activity at its Paulsens gold mine in Western Australia. Revenue from continuing operations rose 14% to A$435.3 million in the first half, with gold sales in the period totaling 267,278 ounces at an average price of A$1,678 per ounce with all-in sustaining costs at A$1,043/oz. Meanwhile, the company lifted its interim dividend by 50% to 4.5 cents per share fully franked.

* Impala Platinum Holdings Ltd. expects to book a headline loss per share of between 17 South African cents and 26 cents for the first half of its fiscal 2018, representing a year-over-year improvement of between 76% and 63%, respectively, compared with the headline loss of 71 cents per share in the year-ago period.

* Regis Resources Ltd. produced a record 184,034 ounces of gold at the company's Duketon gold project in Western Australia in the first half of its fiscal 2018, up from 154,702 ounces produced in the year-ago period. The company's revenue climbed 18% year over year to A$299.0 million in the half, leading to a record net profit after tax of A$84.6 million, representing a 39% year-over-year increase.

* Saracen Mineral Holdings Ltd.'s gold production rose 24% year over year to a record 157,795 ounces in the first half of its fiscal 2018. The company's net profit after tax soared by 209% to A$46.0 million, from A$14.9 million in the first half of fiscal 2017.

* Saturn Metals Ltd.'s A$7 million IPO closed earlier than its expected Feb. 23 closing date and was heavily oversubscribed.

* Bluebird Merchant Ventures Ltd. CEO Colin Patterson said the company is targeting a net profit of US$100 per tonne of gold from a project to reopen shuttered South Korean gold mines, Reuters reported.

* Gladiator Resources Ltd. signed a binding heads of agreement with Thunderbird Metals Pty. Ltd. for the latter to reassign its right to acquire up to a 70% interest in the North Arunta gold joint venture with ABM Resources NL in Australia's Northern Territory.

* South Africa's National Union of Mineworkers claimed that another worker was killed at Sibanye Gold Ltd.'s Driefontein gold mine, part of the Kloof project, due to electrocution, African News Agency reported. The project was recently suspended pending an investigation after three workers were killed in two separate incidents. The company has not yet confirmed the latest incident.

BULK COMMODITIES

* Mosaic Co. swung to a net loss of US$431.1 million, or US$1.23 per share, in the fourth quarter of 2017 despite recording higher sales and operating earnings on a yearly basis. The result included a US$458 million non-cash charge associated with changes in U.S. tax legislation. For full year 2017, Mosaic likewise swung to a net loss of US$107.2 million, compared to net earnings of US$297.8 million in 2016.

* Noble Group Ltd. sees its fourth-quarter 2017 net loss widening to between US$1.73 billion and US$1.93 billion, from the US$1.17 billion net loss booked in the third quarter, as the operating conditions remained challenging in the three-month period. This estimated loss will lead the group to book a full-year 2017 net loss of US$4.78 billion to US$4.98 billion, swinging from 2016's US$8.7 million attributable net profit.

* Russian businessman Mikhail Prokhorov agreed to off-load a 6% stake in Rusal to a consortium led by billionaire Viktor Vekselberg, Reuters reported. The sale will see Vekselberg and his partners boost their stake in the Russian aluminum giant to 26.5%.

* Worthington Industries, Inc. extended the existing US$500 million revolving credit facility until Feb. 16, 2023. The five-year facility was set to mature April 23, 2020.

* The Steel and Engineering Industries Federation of South Africa said a possible tariff on steel imports by the U.S. government could affect South African markets and may result in weaker domestic production, Reuters reported.

* Canada is hopeful that it will be exempt from the recommendation of the U.S. Department of Commerce for tariffs on aluminum and steel imports, Bloomberg News reported, citing Aluminum Association of Canada President Jean Simard.

* Tata Steel Ltd. reportedly submitted the highest bid for insolvent Indian firms Bhushan Steel Ltd and Bhushan Power and Steel Ltd, Metal Bulletin wrote.

* Evraz Plc signed a five-year contract with Russian Railways to supply 3.2 million tonnes of rail products worth 111.7 billion Russian rubles.

* Colombia's coal production fell 1.2% in 2017 to 89.4 million tonnes from 90.5 million tonnes in 2016, Reuters reported, citing a statement from the country's Energy and Mining Ministry.

SPECIALTY

* Russian gas producer PAO NOVATEK won an auction for PJSC Alrosa's gas assets with a bid of 30.3 billion Russian rubles. Alrosa is expected to use up to a third of the proceeds to buy out 10% of its subsidiary PJSC ALROSA-Nyurba shares from Yakutia, while part of the funds will be spent on early repayment of debts, Vedomosti reported citing CEO Sergey Ivanov.

* Stellar Diamonds Plc started a front end engineering and design study for the underground mine development of the Tongo-Tonguma project in Sierra Leone.

* Lithium Power International Ltd. intends to complete its 50% earn-in on the Maricunga lithium brine project in northern Chile by up to six months ahead of the agreed joint venture schedule, following a successful preliminary economic assessment in December 2017.

* Zimbabwe will forge a diamond processing deal with Botswana within the next three months, News24 wrote, citing a report from the Zimbabwean state-owned Herald.

INDUSTRY NEWS

* Glencore Plc and Randgold Resources Ltd. joined a group of major mining companies that plan to make a collective effort to block sweeping mining reforms in the Democratic Republic of the Congo, Bloomberg News reported. Investors want the new group to replace the Chamber of Mines.

* A high court in South Africa ordered the South African government and the Chamber of Mines to involve communities living in mining areas in ongoing talks about the country's mining charter, Mining Weekly reported.

* According to an EY report, global mining and metals deal value in 2017 rose 15% year over year to US$51 billion, but the volume of transactions fell 6%. In 2018, EY expects deals to be supported by investment-led strategies, while some activity will be aimed at building portfolios for future growth.

S&P Global Market Intelligence is owned by S&P Global Inc.

The Daily Dose is updated as of 7 a.m. London time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.