BHP Billiton Ltd. (BHP - Analyst Report) has reported strong financial results for full year ended June 30, 2011 with net income (excluding special items) of $23.6 billion, almost double from $12.7 billion for full year ended June 30, 2010. Earnings per ADR, excluding special items, also grew to $4.27 from $2.28 a year ago. The EPS was however below the Zacks Consensus Estimate of $7.16.
Revenues (Group Production) increased 41% to $67.9 billion from $48.2 billion for full year ended June 30, 2010. Underlying EBIT and EBIDTA were recorded at $32 billion and $37.1 billion, up 62% and 51% respectively, from the year-ago comparable period.
The increase is attributable to BHP Billiton’s diversified portfolio, robust demand driven by China, India and emerging economies along with an increase in the prices of commodities. Moreover, the company’s strategic investment throughout all points of the economic cycle delivered record annual production during the reported period.
Net operating cash flows increased to $30.1 billion from $16.9 billion in the corresponding period of the previous year. Such a strong cash position is expected to comfortably fundstrategic acquisitions as well as extensive organic growth program.
Capital and exploration expenditure summed up to $12.4 billion for the full year ended June 30, 2011. This included major Petroleum and Minerals growth projects of $9.2 billion, $2.0 billion capital expenditure on sustaining and other items and exploration expenditure of $1.2 billion, of which $981 million is classified within net operating cash flows.
Financing cash flows included payments of US$10 billion related to the capital management program, $5.1 billion dividend payments and net debt repayments of $577 million.
Net debt, (including interest bearing liabilities less cash), was recorded at US$5.8 billion, up $2.5 billion compared with the net debt position as of 30 June 2010. Cash and cash equivalent, net of overdrafts, at end of the period, was recorded at $10.1 billion, slightly down from $12.5 billion a year ago.
During the full year ended June 30, 2011, the company completed $10 billion capital management program, highlighting commitment to maintain an appropriate capital structure. BHP Billiton maintains a progressive dividend policy, which raises shareholder sentiments and confidence with 22% rebasing of final dividend for full year dividend payout of $1.01 per share.
Moreover, on completion of the capital management program, BHP Billiton is expected to repurchase a cumulative $22.6 billion of BHP Billiton Limited (Ltd) and BHP Billiton plc shares since 2004, representing 15% of the then issued capital.
BHP Billiton approved 11 major projects for a total investment commitment of $12.9 billion during financial year 2011. The progression of the company’s Jansen Potash Project and Saskatchewan development project are anticipated to invite organic growth exceeding $80 billion by 2015. Moreover, BHP Billiton recently closed the tender offer to acquire all outstanding shares of the common stock of Petrohawk Energy Corporation (HK - Snapshot Report).
BHP Billiton is one of the world’s largest diversified resource companies operating in mineral exploration, production and processing, oil and gas exploration and development, and steel production and merchandising. The company competes directly with its peers, such as Alcoa Inc (AA - Analyst Report), Vale S.A (VALE - Analyst Report).