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BHPBill production report for the Dec 02 quarter
BHPBill reported a 16% decline in the production of oil and condensate production for the quarter to Dec 02, attributed largely to natural field decline in Bass Strait (Australia) and Laminaria (Australia) and ramp up of production following scheduled shutdowns at Liverpool Bay (UK) and Typhoon (US). Alumina production of 998 000 tons was 3% higher than the Dec 01 quarter reflecting the return to full production at Alumar (Brazil) while aluminum production of 266 000 tons was 13% greater than that of the corresponding period. This was attributed to higher production at the group's Hillside operation in South Africa and was in line with production for the Sep 02 quarter. Copper production of 225 600 tons was 2% higher than that of the corresponding period and 22% higher than that of the Sep 02 quarter. A 7% rise in iron ore production was posted with that from Western Australia in line with the record Sep 02 production due to sustained demand from Asian markets. A new sales record of 18.2m tons was set in Western Australian iron ore operations during Dec 02. Production from Brazil was in line with that of the Sep 02 quarter.
Metallurgical coal production of 8.4m tons was in line with expectations and Ekati (TM) diamond production in Canada of 1.07m carats was 15% greater than the Dec 01 quarter and 12% higher than figures reported at Sep 02. Energy coal production for the quarter of 20.6m tons was also in line with targets with decreases from the dale of the PT Arutmin energy coal assets (Indonesia) being offset by higher production at New Mexico Coal (US). Nickel production rose 11% to 19 400 tons reflecting a ramp up of production at Cerro Matoso Line 2 (Colombia) and benefits from ongoing improvements. Ferrochrome production of 230 000 tons was 12% greater, the increase attributed to higher market demand prompting the restart of idle furnaces.
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BHP Billiton CE allays local investment fears
BHP Billiton's new CE, Chip Goodyear, in the country to ally fears that the group could reduce its investment in SA, met with President Thabo Mbeki and trade and industry minister, Alec Erwin, on 21 Jan 03. The meeting covered Billiton's investments in the region and Goodyear promised the group would continue to look for investment opportunities in South Africa. The company insisted that its vision and strategy would remain unchanged despite the exit of Gilbertson. Meanwhile, workers in Melbourne were striking over reports that former CE Gilbertson would receive a R157m golden handshake.
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BHP's new chief to meet Mbeki
Chip Goodyear, BHP's new CE, is scheduled to meet with President Mbeki and the minister of trade and industry on 21 Jan 03. BHP Billiton spokesperson, Michael Campbell, said that reassuring the government the company was still committed to investing in SA was pivotal to the visit. BHP Billiton has 20% of its assets and about 50% of its workforce in the country. Goodyear is committed to carrying out the company's strategy and realising Gilbertson's vision of delivering USD500m in merger savings.
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Speculation of rift in BHP Billiton management
Growing speculation pointing to a rift in the company's management has caused five international investment houses to downgrade their recommendation on Billiton stock since former CEO Brian Gilbertson's resignation. Despite growing uncertainty and frustration about the reasons for Gilbertson's move, Billiton refuses to disclose details, citing only irreconcilable differences around style and approach. However, the stock has dropped only 0.23% in value on the LSE since 6 Jan 03.
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BHP former CE quit over deal
An unconfirmed source close to the company said that former CE Brian Gilbertson had quit after proposing a major international transaction that could have resulted in the chairmanship of BHP Billiton being at stake. The source said details of the proposed deal was due to go to the board in Feb 03 and had been under discussion internally for several months. BHP has described the source's allegation as speculation, but declined to confirm or deny them.
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BHP Billiton and Aussie Govt clash over payout
The Australian government intervened in a looming clash between BHP Billiton and its shareholders over plans to pay Gilbertson a package of as much as USD17m. Australian acting PM John Anderson said the company should declare how much compensation it would pay Gilbertson and BHP Billiton said it would be some time before the severance package for Gilbertson was completed. "Reports that Mr Gilbertson might receive as much as USD17m are most disturbing and shareholders need to consider whether chief executives deserve this sort of reimbursement, particularly when the period of employment is so short," Anderson said in comments faxed to Bloomberg News.
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Possible USD14m Billiton handshake for Gilbertson
The international media has speculated that Gilbertson may receive a payout of approximately USD14m from Billiton. Billiton was expected to gie Gilbertson more than the almost USD10m golden handshake presented to his predecessor, Paul Anderson, despite his exit just six months after taking up the mining industry's top job. The company's 2002 annual report states that Gilbertson has a target bonus of 100% of salary base tied to performance. Gilbertson's contract also entitles him to a total deferred cash bonus of USD3.5m to be paid over four years from the completion of the merger, a rent-free home in Melbourne and shares in the group. Australian newspaper, The Age, said the final figure could ultimately depend on whether pension entitlements were cashed out.
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BHP CEO expected to focus on cutting costs
Varied market sentiment has greeted the appointment of Goodyear as CEO of Billiton. "Goodyear is someone who looks at the numbers and it's a godsend. It's what the company has required for a number of years", said Graham French, a fund manager at M&G Investment Management in London. The new CEO would focus on developing the company's own assets, a board member said. The company had also said that it wants to eliminate USD500m from annual spending by 2005. Paul McTaggart, an analyst at Morgan Stanley in London said, "Goodyear doesn't need to go out and do any wonderful deals. Everybody knows what Billiton needs to do for the next four years: deliver on the projects and cost-cutting."
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New BHP Billiton CE a natural candidate
Mining analysts have expressed confidence in the appointment of Chip Goodyear as BHP Billiton's CE replacing Brian Gilbertson. Goodyear (44), formerly executive vice-president and chief financial officer of NYSE-listed Freeport-McMoRan, has extensive financial, corporate restructuring, and merger and acquisition experience.
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Billiton reassures shareholders of strategy
Billiton announced that Mr Gilbertson`s resignation as CE would not result in any changes to the company's strategy or in initiatives previously announced. Billiton's half year preliminary profit announcement will be made, as scheduled, on 24 Feb 03.
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BHP Billiton CE resigns
Billiton announced that they have appointed Mr Charles (Chip) Goodyear as chief executive to replace Mr Brian Gilbertson, who resigned as chief executive and as a director due to irreconcilable differences with the board. Mr Goodyear (44), joined BHP in 1999 as CFO, and has been the chief development officer for the BHP Billiton group since Jun 2001. He was appointed as an executive director in Nov 2001. Mr Goodyear takes up his new appointment with effect from 6 Jan 03.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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