Rising Copper, Oil Prices Lift BHP and Anglo American Net, HSBC Plunges

Sarla Buch
21 Feb, 2017
New York City

Anglo American swung to profit after reduced capital expenditure and rebound in metal prices. BHP Billiton net swung to profit despite massive pre-tax write-downs. HSBC declined after profit and revenues declined. InterContinental Hotels will pay special dividend of $400 million.

[R]4:00 PM Frankfurt – Anglo American swung to profit after reduced capital expenditure and rebound in metal prices. BHP Billiton net swung to profit despite massive pre-tax write-downs. HSBC declined after profit and revenues declined. InterContinental Hotels will pay special dividend of $400 million.[/R]

In London trading, FTSE 100 index fell 13.71 or 0.2% to 7,291.02 and in Frankfurt the DAX index gained 87.68 or 0.7% to 11,915.35.

In Paris, CAC 40 index increased 19.05 or 0.4% to 4,884.12.

Anglo American Plc slipped 1.6% to 1,338.50 pence after the U.K.-based diamonds and platinum producer said revenues in the year ending in December jumped 4.4% from a year ago to $21.4 billion.

Net in the year swung to profit from a year ago to $1.6 billion compared to a loss of $5.6 billion and diluted earnings per share swung to $1.23 from diluted loss per share of $4.36.

Anglo American canceled its divestment plan of money-losing coal and iron ore businesses after coal and iron ore prices rallied in 2016.

The metal producer said capital expenditure dropped 37% to $2.5 billion and net debt decreased $4.4 billion to $8.5 billion from $12.9 billion in a year ago.

BHP Billiton Plc slid 0.1% to 1,398.11 pence after the U.K.-based miner and explorer reported revenues in the first-half ending in December revenues in the year ending in December soared 19.7% from a year ago to $18.8 billion.

Net in the year swung to profit from a year ago to $3.2 billion compared to a loss of $5.7 billion and diluted earnings per share swung to 60 cents from diluted loss per share of 106.5 cents.

At the end of fiscal 2016, the miner said net debt declined 23% to $20.06 billion.

In 2016, the miner booked pre-tax write-downs of $11 billion after it wrote down the onshore oil and gas fields in the U.S. by $9.4 billion and $1.53 billion related to the ongoing cost of Samarco mine in Brazil.

BHP along with its partner Vale agreed to settle $62 billion civil compensation with the Brazilian government.

""We are confident in the long-term outlook for our commodities, particularly oil, with markets expected to rebalance in the near-term and copper where we expect a deficit to emerge in the early 2020s,"" chief executive officer Andrew Mackenzie said.

HSBC Holdings Plc declined 7% to 662.30 pence after the U.K.-based banking and financial services provider reported revenues in the year ending in December plunged 19.8% from a year ago to $47.97 billion.

Net profit in the year plummeted 89.7% from a year ago to $1.3 billion compared to $12.6 billion and diluted earnings per share dropped to 7 cents from 64 cents.

The bank booked about $3.2 billion impairment charges in European global private banking business.

HSBC confirmed new share buy-back of $1 billion, as the lender continued to return cash to shareholders from the sale of Brazilian business, following the buy-backs in the second half of 2016 of $3.5 billion.

Pre-tax profit in the year tumbled 62.4% to $7.1 billion or £5.7 billion from $18.9 billion in a year ago and the bank cut its global bonus pool by 12% to $3 billion after the worse than expected profits.

""2016 will long be remembered for its significant and largely unexpected economic and political events,"" Chairman Douglas Flint said.

“The bank yet has to shortlist the candidates to replace Chairman Douglas Flint, but the successor will be identified by the end of 2017,” Stuart Gulliver said in a conference call.

InterContinental Hotels Group Plc gained 0.5% to 3,898 pence after the U.K.-based hotels operator said revenues in the year ending in December dropped 5.5% from a year ago to $1.7 billion.

Net profit in the year plunged 65.5% from a year ago to $414 million compared to $1.2 billion and diluted earnings per share slumped 193.5 cents from 513.4 cents.

The hotelier said it will pay special dividend of 94 cents per share or $400 million on the of stronger-than-expected full year results.

Telefonica SA fell 0.4% to €9.36 after Spain-based diversified telecommunication services provider agreed to sell up to 40% stake of Telxius Telecom, S.A.U. to Taurus Bidco S.à.r.l. managed by KKR & Co for €12.75 per share or about €1.28 billion.

The agreement includes the acquisition of 24.8% of total shares of Telxius for €790 million, as well as the option to acquire additional 15.2% of total shares for at least €485 million.