BHP returns record profit of $752M

Press, 27 July 1985, Page 21

BHP returns record profit of $752M

NZPA-AAP Melbourne Australia’s biggest company, Broken Hill Proprietary Company, Ltd, has announced a record $752.59 million net profit for the year to May 31. The profit easily surpasses the previous year’s record earnings of $622.25 million and is in line with market expectations of a profit of between $7lO million and $770 million. Group sales for the latest year totalled $7.1 billion, compared with $5.3 billion in 1983-84 and reflect a lift in Bass Strait crude oil production to record levels. Earnings a share rose to 73c from 69c, with shareholders having already been paid a final dividend of 15c a share, compared with the previous year’s final payment of 11.5 c. The final dividend payment brought the total pay-

out to shareholders in 198485 to 27.5 c a share, compared with 21.5 c the previous year. Announcing the profit, BHP directors said the petroleum division increased its net contribution by $58.35 million in the latest year to $484.73 million, largely because of higher crude oil sales resulting from increased Bass Strait production and a continuation of Government approval for the export of crude oil. The Utah coal division’s first full year’s profit contribution since its acquisition on April 1 last year totalled $140.49 million. The previous year only earnings for April and May totalling $9.89 million, were included in the group’s annual results. Utah received significant benefit in the latest year from improved prices for

its United States dollardenominated export sales from the Queensland coal operations and from increased shipments. The results of the Ameri-can-based Energy Reserves Group — since renamed BHP Petroleum (Americas), Inc — were included in the Utah division’s result from January 1. The minerals division experienced a drop of $10.59 million to $62.93 million, largely because of reduced investment allowance claims and a consequential increase in tax expense. But, the directors said, with improving demand and increased margins, particularly for iron ore and manganese, recent results have been encouraging. The steel division reported an improved profit of $128.79 million, compared with $96.62 million the previous year. This reflected the benefits of the division’s cost-reduction

programme, improved productivity, and increased margins on export sales. The Lysaght steel products division increased by $5.17 million to $44.49 million on higher domestic sales volumes, helped by bounty receipts under the Federal Government’s steel industry plan. The directors said all divisions benefited to some degree from the depreciation of the Australian dollar. They said they have also reviewed the carrying value of the group’s equity investment in Papua New Guinea’s Ok Tedi gold and copper project and have concluded the existing investment could not be supported by prospects for the venture in the next few years. “Directors have therefore decided to reduce the carrying value of this investment to nil by charging an extraordinary item of $97.47 million in 1985.”