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Bhp Billiton
BHP Billiton Plc
ISIN Code : GB0000566504
Share Code : BIL
BHP BILLITON RESULTS FOR THE NINE MONTHS ENDED 31 MARCH 2003
EBITDA up 9% to US$3,857 million and EBIT up 12% to US$2,623 million, both from
continuing operations.
Attributable profit of US$1,375 million and earnings per share of 22.2 US cents
(both from continuing operations) impacted by adverse movements in exchange
rates compared with the corresponding period.
Despite challenging market conditions, third quarter EBITDA of $1,406 million
was the highest since the merger.
Continued progress with the pipeline of projects; first metal from the Mozal
(Mozambique) aluminium expansion ahead of schedule in April 2003, and santion
was given in March 2003 for the development of the Greater Angostura (Trinidad)
oil and gas field.
Successful issue of US$850 million senior notes under inaugural global bond in
April 2003.
Final dividend declared of 7.5 US cents per share, to be paid on 2 July 2003, an
increase of 15.4% (in US dollars) compared with the final dividend declared in
the corresponding period.
Nine months ended 31 March Quarter ended 31 March
2003 2002 Change % 2003 2002 Change %
US$M US$M US$M US$M
(1) (1) (1) (1)
Turnover (2) 12 623 11 320 11.5% 4 575 3 671 24.6%
EBITDA (2) (3) (4) 3 857 3 536 9.1% 1 406 1 141 23.2%
EBIT (2) (3) (4) 2 623 2 347 11.8% 964 751 28.4%
Attributable 1 375 1 553 -11.5% 444 398 11.6%
profit (2) (3)
Basic earnings per 22.2 25.8 -14.0% 7.2 6.6 9.1%
share (US cents)
(2) (3)
EBITDA interest 12.9 10.6 21.7% 14.2 15.8 -10.1%
coverage (times)
(2) (3) (4) (5)
From continuing operations, excluding the results of the Group"s Steel business
which was demerged in July 2002. Refer page 8.
Including the Group"s share of joint ventures and associates.
There were no exceptional items in relation to continuing operations in either
period.
EBIT is earnings before interest and tax. EBITDA is EBIT before
depreciation and amortisation of Group companies of US$1,234 million and
US$1,189 million for the nine months ended 31 March 2003 and 2002 respectively,
and US$442 million and US$390 million for the quarters ended 31 March 2003 and
2002, respectively. We believe that EBIT and EBITDA provide useful information,
but should not be considered as an indication of, or alternative to, net profit
as an indicator of operating performance or as an alternative to cash flow as a
measure of liquidity.
For this purpose, net interest includes capitalised interest and
excludes the effect of discounting on provisions and exchange differences
arising from net debt.
The above financial results are prepared in accordance with UK generally
accepted accounting principles (GAAP) and are unaudited. Financial results in
accordance with Australian GAAP are provided on page 13.
All references to the corresponding period are to the nine months ended 31 March
2002.
RESULTS FOR THE NINE MONTHS ENDED 31 MARCH 2003
Commentary on the Group Results
Introduction
Although global economic conditions remained weak, operating and financial
results for the nine months ended 31 March 2003 were solid and EBITDA generation
from our portfolio of high quality long life assets was strong. This strong
performance illustrates improved sales volumes, higher product prices, the
continuation of cost savings initiatives, strong demand in China and East Asia
and the benefits of our diversified portfolio of resource businesses.
This financial strength enables us to proceed with our portfolio of growth
projects. Progress on all projects continues to be on or ahead of schedule and
budget. There are currently 14 major capital projects under development,
including the recently approved Phase 1 development of the Greater Angostura oil
and gas field off the northeast coast of Trinidad and the Atlantis full field
development in the Gulf of Mexico. The first aluminium was cast from the new
facilities at Mozal (Mozambique) on 7 April 2003, more than five months ahead of
schedule. Cost trends to date indicate that the project will likely be
completed below budget. Final costs for the Escondida (Chile) Phase IV
expansion project on a 100% basis were US$944 million, well below the budgeted
cost of US$1,045 million.
Strong cash flows have enabled the Board to increase annual dividends declared
to shareholders for the full year, from 13.0 US cents per share last year to
14.5 US cents per share in the full year ending 30 June 2003, an increase of
11.5% (in US dollars). A final dividend of 7.5 US cents will be paid on 2 July
2003. The interim dividend of 7.0 US cents per share was paid on 4 December
2002.
The Income Statement
During the period, the Group"s Steel business was demerged. In order to provide
meaningful comparison the discussion in this section is based on the Group"s
continuing operations, excluding exceptional items and the Group"s Steel
business.
Turnover rose by 11.5% to US$12,623 million, mainly due to higher sales volumes
of iron ore, copper, diamonds, energy coal and aluminium and higher prices for
petroleum products, nickel, copper, manganese and chrome. These factors were
partly offset by lower sales volumes of petroleum products and lower prices for
export energy coal, diamonds and iron ore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased
by 9.1% to US$3,857 million from US$3,536 million in the corresponding period.
Earnings before interest and tax (EBIT) were US$2,623 million compared with
US$2,347 million in the corresponding period, an increase of 11.8%. This
increase was due to generally higher commodity prices, increased sales volumes,
cost savings, lower exploration expense and increased profits from new and
acquired operations. Offsetting factors were inflationary pressures,
principally in South Africa, increased price linked costs, lower profits from
ceased, sold and discontinuing operations and lower profits as a consequence of
asset sales recorded in the corresponding period. Please refer to pages 6 and 7
for further analysis of the factors affecting turnover and EBIT.
Net interest on borrowings and cash fell from US$334 million to US$299 million,
principally driven by lower market interest rates and lower average debt levels.
Exchange losses on net debt were US$106 million compared with gains of US$220
million in the corresponding period, mainly in relation to the translation of
Rand denominated debt of companies which account in US dollars as their
functional currency. The Rand appreciated by 22% during the current period
compared with depreciation of 42% in the corresponding period.
The tax charge was US$829 million, representing an effective rate of 37.2%.
Excluding the impacts on tax of non tax-effected foreign currency adjustments,
translation of tax balances and other functional currency translation
adjustments, the effective rate was 31.3%.
Attributable profit in the current period was US$1,375 million, a decrease of
11.5%, from US$1,553 million in the corresponding period. This was mainly
attributable to the movement in the Rand/US$ period-end exchange rates, partly
offset by the higher EBIT in the current period.
Basic earnings per share was 22.2 US cents per share against 25.8 US cents per
share in the corresponding period, a reduction of 14.0%, reflecting the
reduction in attributable profit and an increased number of shares on issue
(including the equalisation issue associated with the BHP Steel demerger).
Discontinued Operations / Exceptional Items
The demerger of the Group"s Steel business became unconditional on 1 July 2002.
The contribution of the Group"s Steel business in the corresponding period has
been disclosed as discontinued operations. The 6% interest in BHP Steel
retained by BHP Billiton was sold in July 2002 for US$75 million and the loss of
US$19 million associated with this sale has been recognised in the current year
and is disclosed as an exceptional item in relation to discontinued operations.
The demerger was effected through a Court approved capital reduction of A$0.69
per BHP Billiton Limited share totalling approximately US$1.5 billion (A$2.6
billion) via the transfer of BHP Steel Limited shares to BHP Billiton Limited
shareholders. Consequently, BHP Billiton Plc shareholders received
approximately 149 million equalisation shares.
After including discontinued operations and exceptional items, the attributable
profit for the period was US$1,356 million, US$248 million lower than the
US$1,604 million for the corresponding period, again, primarily due to exchange
losses in the current period and exchange gains in the corresponding period,
partly offset by the higher EBIT in the current period. Basic earnings per
share, including discontinued operations and exceptional items, was 21.9 US
cents per share, 17.7% lower than the 26.6 US cents per share of the
corresponding period.
Capital Management
The Group successfully launched its 10 year inaugural global bond in mid-April
2003 with US$850 million of senior notes being issued. The issue was
competitively priced at 80 basis points above the relevant US Treasury
benchmark, reflecting the strength of BHP Billiton"s credit.
Dividend
A final dividend of 7.5 US cents per share will be paid to BHP Billiton Limited
and BHP Billiton Plc shareholders on 2 July 2003, bringing the total dividend
for the year to 14.5 US cents per share. The BHP Billiton Limited dividend will
be fully franked for Australian taxation purposes.
Dividends for the BHP Billiton Group are determined and declared in US dollars.
However, BHP Billiton Limited dividends are mainly paid in Australian dollars
and BHP Billiton Plc dividends are mainly paid in pounds sterling to
shareholders on the UK section of the register and South African Rand to
shareholders on the South African section of the register. The rates of
exchange applicable two business days before the announcement date are used for
conversion, and are detailed below.
The timetable in respect of this dividend will be:
Currency conversion 5 May 2003
Last day to trade Johannesburg Securities 6 June 2003
Exchange SA (JSE)
Ex-dividend Australian Stock Exchange (ASX) 6 June 2003
Ex-dividend Johannesburg Stock Exchange (JSE) 9 June 2003
Ex-dividend London Stock Exchange (LSE) 11 June 2003
Record 13 June 2003
Ex-dividend Euronext Paris 16 June 2003
American Depositary Shares (ADSs) each represent two fully paid ordinary shares
and receive dividends accordingly. The record date for ADSs is 12 June 2003.
BHP Billiton Plc shareholders registered on the South African section of the
register will not be able to dematerialise or rematerialise their shareholdings,
nor will they be able to effect transfers between the UK register and the South
African register between the dates of 9 June 2003 and 13 June 2003.
The following table details the exchange rates applicable for conversion of the
dividend payable on 2 July 2003:
Exchange Dividend per ordinary share
Dividend 7.5 US cents Rate in local currency
Australian cents 0.631245 11.8813
British pence 1.605055 4.6727
South African cents 7.450309 55.8773
New Zealand cents 0.564300 13.2908
Euro cents 1.124400 6.6702
Canadian cents 1.417500 10.6313
Corporate Governance
No payments have been made to Mr Brian Gilbertson in connection with the
cessation of his employment on 5 January 2003, nor has agreement been reached on
the quantum of any payments to be made. Any payments will be disclosed
immediately they are finalised. The terms under which Mr Gilbertson was
employed, including the basis upon which the contracts of employment could be
brought to an end, are set out in the Remuneration Report that forms part of the
Annual Report published in September 2002. Details were also included in the
explanatory material provided to shareholders ahead of their consideration of
the merger.
In addition to the payments to be made under the terms of Mr Gilbertson"s
employment contracts, Mr Gilbertson has accrued entitlements under the
applicable pension/superannuation arrangements which have been in place for the
duration of his employment with the Group or predecessor companies. Mr
Gilbertson"s period of pensionable service is over 30 years. The amount payable
under these pension/superannuation arrangements has been reported each year in
the Annual Report.
Outlook
Although the global geo-political tension related to the conflict in Iraq
appears to have subsided, the global economy shows little sign of recovery. One
of the key features of major economies in recent months has been the inability
to generate new jobs and investment, both of which are fundamental to an
improvement in commodity markets. London Metals Exchange stock levels remain
high. After a brief, albeit modest rally, prices, in general, are now at levels
similar to the start of the year. Uncertainty surrounding the conflict in Iraq
and production strikes in Venezuela forced oil prices to near record highs
during the last three months, but they have since retreated to levels similar to
those seen in calendar 2002. Demand for iron ore and alumina continued to
benefit from the strong Chinese economy. As yet, we have seen no decrease in
product demand in China, however the emergence of Severe Acute Respiratory
Syndrome (SARS) has the potential to disrupt economic growth in China in the
short to intermediate term.
Overall, until there are signs of a synchronised global economic upturn, we
remain cautious in our outlook for key commodity markets. With a diversified
portfolio of high quality assets generating stable cashflows, we are well placed
to respond to opportunities in the current environment and benefit once the
upturn occurs.
TRADING REVIEW
EBIT
The following table details the approximate impact of major factors affecting
EBIT for the nine months ended 31 March 2003 compared with the corresponding
period.
US$M
EBIT from continuing operations
for the nine months ended 31 March 2002 2 347
Change in volumes 170
Change in sales prices 375
Price-linked costs (115)
Inflation on costs (205)
Costs 170
New and acquired operations 25
Exchange rates (65)
Ceased, sold and discontinuing operations (90)
Asset sales (45)
Exploration 85
Other items (29)
EBIT from continuing operations for
the nine months ended 31 March 2003 2 623
Volumes
Higher sales volumes of iron ore, copper, diamonds, energy coal and aluminium
were partly offset by lower sales volumes of petroleum products, resulting in a
positive net volume impact on EBIT of approximately US$170 million.
Prices
Higher realised prices for petroleum products, nickel, copper, manganese and
chrome increased turnover by approximately US$625 million. This increase was
partly offset by lower prices for export energy coal, diamonds and iron ore that
decreased turnover by approximately US$250 million.
Costs
Favourable operating cost performance increased EBIT by approximately US$170
million compared with the corresponding period. The Group"s cost reduction
initiatives and reduced pot-relining costs at Hillside (South Africa) lowered
costs by approximately US$310 million. These factors were partially offset by
higher costs at Escondida (Chile) from processing lower grade ore due to the
voluntary production cut-backs and higher depreciation from the start-up of the
Phase IV expansion project. Increased depreciation charges in Energy Coal (as a
result of a review of asset lives) and Petroleum also had an unfavourable impact
on operating costs.
Increases in price-linked costs depressed EBIT by approximately US$115 million,
mainly due to higher royalties and taxes for petroleum products.
Inflationary pressures, principally in South Africa, and to a lesser extent in
Australia, increased costs by approximately US$205 million.
New and acquired operations
New and acquired operations increased EBIT by approximately US$25 million due to
the commencement of commercial production at Antamina (Peru) in October 2001 and
the higher ownership interest in Cerrejon Coal Company (Colombia) from February
2002.
Ceased, sold and discontinuing operations
The corresponding period included EBIT of approximately US$90 million mainly
from PT Arutmin (Indonesia), divested in November 2001, and the Rietspruit
energy coal mine (South Africa), which was closed in May 2002.
Asset sales
The impact of asset sales is a reduction in EBIT of approximately US$45 million
mainly from the divestment of PT Arutmin in the corresponding period.
Exchange rates
The impact of stronger A$/US$ and Rand/US$ exchange rates on operating costs had
an unfavourable impact on EBIT of approximately US$195 million. The conversion
of Rand denominated net monetary liabilities at balance sheet date
(approximately US$40 million) also had an unfavourable impact on operating
costs. This was partly offset by reduced losses on legacy A$/US$ currency
hedging compared with the corresponding period of approximately US$145 million.
In addition, the lower average Colombian Peso/US$ and Brazilian Real/US$
exchange rates (approximately US$25 million) had a favourable impact on
operating costs.
Exploration
Exploration expense was down by approximately US$85 million. The prior period
included the write off of exploration expenditure at La Granja (Peru) and higher
exploration expense in Petroleum.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
(prepared in accordance with UK GAAP)
Nine months ended 2003 2002
31 March
US $ millions Discont
inued
Continu Operati Continu Discont
ing ons/ Total ing inued Total
Operati Excepti Operati Operati
ons onal ons ons
Items
Turnover (including 12 623 - 12 623 11 320 1 856 13 176
share of joint ventures
and associates"
turnover)
Less: share of joint (1 420) - (1 420) (1 189) (143) (1 332)
ventures and
associates" turnover
Group turnover 11 203 - 11 203 10 131 1 713 11 844
Net operating costs (7 656) - (7 656) (6 933) (1 567) (8 500)
(excluding depreciation
and amortisation)
Depreciation and (1 234) - (1 234) (1 189) (97) (1 286)
amortisation (b)
Group operating profit 2 313 - 2 313 2 009 49 2 058
Share of operating 268 - 268 240 - 240
profit of joint
ventures and associates
Operating profit 2 581 - 2 581 2 249 49 2 298
(including share of
profit of joint
ventures and
associates)
Income from other fixed 15 - 15 27 1 28
asset investments
Profit on sale of fixed 27 - 27 2 15 17
assets
Profit on sale of - - - 69 - 69
subsidiaries
Loss on sale of - (19) (19) - - -
discontinued operations
Profit/(loss) before 2 623 (19) 2 604 2 347 65 2 412
net interest and
similar items payable,
and taxation (EBIT) (a)
Net interest and
similar items payable
- Group (327) - (327) (114) (3) (117)
- Joint ventures and (69) - (69) (4) (7) (11)
associates
Profit/(loss) before 2 227 (19) 2 208 2 229 55 2 284
taxation
Taxation (829) - (829) (648) 1 (647)
Profit /(loss) after 1 398 (19) 1 379 1 581 56 1 637
taxation
Equity minority (23) - (23) (28) (5) (33)
interests
Attributable 1 375 (19) 1 356 1 553 51 1 604
profit/(loss)
EBITDA (a) + (b) 3 857 (19) 3 838 3 536 162 3 698
Earnings per ordinary 22.2 (0.3) 21.9 25.8 0.8 26.6
share (basic) (US
cents)
Earnings per ordinary 22.1 (0.3) 21.8 25.7 0.8 26.5
share (diluted) (US
cents)
For the year ended 30 June 2002 BHP Steel"s results were reported as
discontinued operations due to the demerger of the BHP Steel business in July
2002. The nine months ended 31 March 2002 has been restated accordingly. There
are no exceptional items in net operating costs of discontinued operations for
the nine months ended 31 March 2002. Net interest shown against discontinued
operations includes that amount of net external interest that is directly
attributable to the discontinued operations. Taxation is the nominal charge on
the profit before taxation.
Under the terms of the DLC merger, the rights to dividends of a holder of an
ordinary share in BHP Billiton Plc and a holder of an ordinary share in BHP
Billiton Limited are identical. Consequently, earnings per share has been
calculated on the basis of the aggregate number of ordinary shares ranking for
dividend. The weighted average number of shares used for the purposes of
calculating basic earnings per share is calculated after deduction of the shares
held by the share repurchase scheme and the Billiton Employee Share Ownership
Trust.
The calculation of basic earnings per ordinary share is based on earnings after
tax and minority interests of US$1 356 million (31 March 2002: US$1 604 million)
and the weighted average number of ordinary shares outstanding of 6 205 million
(31 March 2002: 6 026 million). The calculation of diluted earnings per share
is based on earnings after tax and minority interest of US$1 356 million (31
March 2002: US$1 604 million) and the weighted average number of shares
outstanding of 6 224 million (31 March 2002: 6 039 million). The exceptional
loss of US$19 million upon sale of the 6% interest in BHP Steel for US$75
million in July 2002 reduced basic and diluted earnings per share by 0.3 US
cents for the nine months ended 31 March 2003.
The financial information has been prepared using the same accounting policies
as were used in preparing the results for the BHP Billiton Group as presented in
the BHP Billiton Plc financial statements for the year ended 30 June 2002.
CUSTOMER SECTOR GROUP SUMMARY
The following table provides a summary of the Customer Sector Group results for
the nine months ended 31 March 2003 and the corresponding period (for continuing
operations and before exceptional items).
Nine months ended Turnover (1)(2) EBIT(2)
31 March (US$ Million)
2003 2002 Change % 2003 2002 Change %
Petroleum 2 420 2 121 14.1 988 827 19.5
Aluminium 2 437 2 064 18.1 445 324 37.3
Base Metals 1 426 1 308 9.0 185 122 51.6
Carbon Steel Materials 2 692 2 492 8.0 774 831 -6.9
Diamonds and Specialty 1 066 1 081 -1.4 206 190 8.4
Products
Energy Coal 1 502 1 433 4.8 165 462 -64.3
Stainless Steel Materials 758 653 16.1 100 -24
Group and Unallocated Items 676 502 34.7 -240 -385 37.7
BHP Billiton Group 12 623 11 320 11.5 2 2 11.8
from continuing operations 623 347
(1) BHP Billiton Group turnover is stated after the elimination of intersegment
transactions.
(2) Turnover and EBIT include trading activities comprising the sale of third
party product.
An explanation of the factors influencing EBIT, including joint ventures and
associates, by Customer Sector Group, is as follows:
Petroleum
Petroleum contributed EBIT of US$988 million, up from US$827 million, an
increase of 19.5% compared with the corresponding period.
The increase in EBIT was due mainly to a higher average realised oil price of
US$28.87 per barrel compared to US$21.99 per barrel in the corresponding period,
higher average natural gas prices of US$2.12 per million standard cubic feet
compared with US$1.78 per million standard cubic feet in the corresponding
period, together with lower exploration costs in the current period and higher
volumes at North West Shelf (Australia) due to timing of shipments.
These factors were partly offset by lower overall sales and production volumes
at Liverpool Bay (UK) due to scheduled maintenance and natural field decline,
and lower production at Bass Strait (Australia) and Laminaria (Australia) due to
natural field decline. Overall, production of petroleum products on a barrel of
oil equivalent basis declined by 9.0%. An increase in price-linked costs
(royalties and taxes), higher per unit depreciation and the effect of the
stronger A$/US$ average exchange rate on operating costs also had an
unfavourable impact on EBIT.
A government driven change to fiscal arrangements in Bolivia in January 2003 has
resulted in a write down of the Group"s Bolivian assets. This was largely
offset by other one-off items, including a profit from the negotiated
termination of UK gas sales contracts at Bruce (UK) which occurred in February
2003 and a profit from the farm-out of exploration acreage in February 2003.
Aluminium
Aluminium contributed EBIT of US$445 million, up from US$324 million, an
increase of 37.3% compared with the corresponding period.
The increase in EBIT was mainly attributable to improved operational cost
performance resulting from increased production and reduced maintenance costs.
Increased production at Hillside was mainly attributable to the continued
success of Operating Excellence projects and increased production at Alumar was
due to the end of power restrictions in Brazil. Lower maintenance costs at
Hillside were mainly a result of a lower number of pots being relined in the
current period, combined with the absence of the net costs associated with the
September 2001 power outage. Lower costs at Worsley were due to reduced costs
of consumables. The weakening of Brazilian Real/US$ average exchange rate also
had a favourable impact on operating costs.
These factors were partially offset by the unfavourable impact of inflationary
pressure on costs in South Africa and the effect of the strengthening of the
Rand/US$ and A$/US$ average exchange rates on operating costs.
Base Metals
Base Metals contributed EBIT of US$185 million, up from US$122 million, an
increase of 51.6% compared with the corresponding period.
The increase in EBIT was mainly attributable to lower exploration expense with
US$38 million relating to the write off of La Granja included in the
corresponding period. EBIT was also favourably impacted by increased production
from the Escondida Phase IV expansion which was completed in October 2002. Also
contributing to the increase in EBIT was the higher average realised copper
price at US$0.71 per pound for the nine months ended 31 March 2003, compared to
US$0.68 per pound in the corresponding period. EBIT also benefited from a full
nine months of operations from Antamina which commenced commercial production in
October 2001.
These factors were partially offset by increased unit costs at Escondida from
mining lower grade ore due to production cut-backs and higher depreciation
charges associated with the Phase IV expansion project.
Carbon Steel Materials
Carbon Steel Materials contributed EBIT of US$774 million, down from US$831
million, a decrease of 6.9% compared with the corresponding period.
The decrease in EBIT was mainly attributable to the unfavourable impact of
stronger A$/US$ average exchange rates on operating costs compared to the
corresponding period and inflationary pressures on costs in Australia and South
Africa. Lower iron ore prices, following the contract settlements announced in
May 2002, also negatively impacted EBIT.
These factors were partially offset by continued strong demand for Western
Australian iron ore from Asian markets, as well as increased demand for Samarco
(Brazil) pellets and higher prices for manganese alloy. Lower costs due to
increased production at Illawarra Coal (Australia), and improved operating
performance and prices at BoodarieTM Iron (Australia) also had a favourable
impact on EBIT.
Diamonds and Specialty Products
Diamonds and Specialty Products contributed EBIT of US$206 million, up from
US$190 million, an increase of 8.4% compared with the corresponding period.
The increase in EBIT was primarily due to increased diamond production, mainly
as a result of increased plant throughput and processing efficiencies. Titanium
sales were higher in the current period, due to shipping delays experienced in
the corresponding period. Cost efficiencies were achieved by Integris Metals
(US) subsequent to the merger of BHP Billiton"s and Alcoa Metals" metals
distribution businesses on 1 November 2001.
These factors were partially offset by lower average realised diamond prices
(down 11%) as a result of a change in product mix compared with the
corresponding period. Further, during the current period Integris" volumes have
been adversely affected by market conditions in North America.
Energy Coal
Energy Coal contributed EBIT of US$165 million, down from US$462 million, a
decrease of 64.3% compared with the corresponding period.
The decrease in EBIT was primarily due to a significant decline in export market
prices. The divestment of PT Arutmin in November 2001 and the closure of the
Rietspruit mine in May 2002 had an unfavourable impact on EBIT with both the
exclusion of the results of these operations in the current period and the US$64
million profit on sale of PT Arutmin recorded in the corresponding period. The
conversion of Rand denominated net monetary liabilities at balance date, in
addition to the impact of stronger Rand/US$ average exchange rates on operating
costs, had an unfavourable impact on EBIT. Depreciation charges were higher in
the current period as a result of a review of asset lives, and costs in South
Africa and Colombia have been affected by inflationary pressures.
These factors were partially offset by higher sales volumes at Ingwe (South
Africa) and at Hunter Valley (Australia) with the Mount Arthur North project
ramping up production. The inclusion of profits from the additional share of
the Cerrejon Coal Company operation and cost improvement initiatives across all
Energy Coal operations also had a favourable impact on EBIT.
Stainless Steel Materials
Stainless Steel Materials contributed EBIT of US$100 million, compared with a
loss of US$24 million in the corresponding period.
The increase in EBIT was driven by higher realised prices for nickel, up by 32%
from US$2.52 per pound to US$3.33 per pound. In addition, the realised price
for ferrochrome was higher in the current period in response to increasing
market demand. Benefits from ongoing improvement programs at both Cerro Matoso
(Colombia) and QNI (Australia), an increase in nickel production, reflecting the
ramp-up of production from Cerro Matoso Line 2, and an increase in ferrochrome
production, associated with the restart of idle furnaces, also had a favourable
impact on EBIT.
These factors were partially offset by the unfavourable impact of inflationary
pressures on costs in South Africa.
Group and Unallocated Items
Corporate overheads for the nine months ended 31 March 2003 decreased by US$41
million to US$148 million. Losses on legacy A$/US$ currency hedging also
decreased to US$105 million from US$249 million in the corresponding period,
which were partly offset by the unfavourable impact of one-off items.
BHP BILLITON GROUP
STATEMENT OF FINANCIAL PERFORMANCE
(prepared in accordance with Australian GAAP)
Nine months ended 31 March 2003 2002
US$M US$M
Revenue from ordinary activities
Sales 11 184 11 817
Other revenue 682 911
11 866 12 728
Profit from ordinary activities before
Depreciation, amortisation and borrowing 3 439 3 985
costs
Deduct: Depreciation and amortisation 1 233 1 317
Borrowing costs 246 360
Profit from ordinary activities before tax 1 960 2 308
Deduct: Tax expense attributable to 612 702
ordinary activities
Net profit 1 348 1 606
Outside equity interests in net profit (23) (33)
Net profit attributable to members of the BHP 1 325 1 573
Billiton Group
Basic earnings per fully paid ordinary share 21.4 26.1
(US cents)
Basis of Preparation
The results of the BHP Billiton Group, comprising BHP Billiton Limited and BHP
Billiton Plc and their respective subsidiaries, for the nine months ended 31
March 2003, and the corresponding period, have been prepared in accordance with
Australian GAAP and Practice Note 71 `Financial reporting by Australian entities
in dual listed company arrangements" issued by the Australian Securities and
Investments Commission.
The financial information has been prepared using the same accounting policies
as were used in preparing the results for the BHP Billiton Group as presented in
the BHP Billiton Limited financial statements for the year ended 30 June 2002.
The above financial results are unaudited.
Forward-looking statements
Certain statements contained in this release, including statements in the
section entitled `Outlook", may constitute "forward-looking statements" within
the meaning of the US Private Securities Litigation Reform Act of 1995. We
undertake no obligation to revise the forward-looking statements included in
this release to reflect any future events or circumstances. Our actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements. Factors that could cause or
contribute to such differences are discussed in the sections entitled `Risk
Factors" and `Operating and Financial Review and Prospects-General factors
affecting our operating results" included in our amended annual report on Form
20-F/A for the fiscal year ended 30 June 2002, which we filed with the US
Securities and Exchange Commission (SEC) on 10 April 2003 and is available on
the SEC"s website at "www.sec.gov".
Further information on BHP Billiton can be found on our Internet site:
http://www.bhpbilliton.com
Australia
Andrew Nairn, Investor Relations
Tel: +61 3 9609 3952 Mobile: +61 408 313 259
email: Andrew.W.Nairn@bhpbilliton.com
Tracey Whitehead, Media Relations
Tel: +61 3 9609 4202 Mobile: +61 419 404 978
email: Tracey.Whitehead@bhpbilliton.com
United Kingdom
Mark Lidiard, Investor & Media Relations
Tel: +44 20 7802 4156
email: Mark.Lidiard@bhpbilliton.com
Ariane Gentil, Media Relations
Tel: +44 20 7802 4177
Email: Ariane.Gentil@bhpbilliton.com
United States
Francis McAllister, Investor Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699
email: Francis.R.McAllister@bhpbilliton.com
South Africa
Michael Campbell, Investor & Media Relations
Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Michael.J.Campbell@bhpbilliton.com
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