WARNING SEES ASG SHARES HIT THE SKIDS
BHP feels copper pain and eyes US shale acreage sale
BHP Billiton has cut its fullyear copper production guidance and outlined plans to sell some of its US shale acreage.
The mining giant yesterday reported a 44 per cent drop in third quarter copper production largely due to industrial action at its Escondida joint venture in Chile.
Total copper production for the nine months to March 31 was down 20 per cent on the same period a year ago and BHP now expects to produce between 1.33 million and 1.36 million tonnes for the full year.
Nonetheless, BHP shares rose after chief executive Andrew Mackenzie confirmed plans to further streamline the company by selling acreage in the Eagle Ford shale region in the southern US state of Arkansas.
“Everything we do at BHP Billiton is designed to create value for all of our shareholders, today and for the long term,” he said.
“Plans to monetise a portion of our non-core acreage for value, such as parts of the southern Hawkville (field), are under way.”
Coking coal production for both the March quarter and the year-to-date were both up two per cent. But BHP still cut its coking coal production guidance from 44 million tonnes to between 39 million and 41 million due to the damage done to Queensland rail infrastructure by Cyclone Debbie.
Nine-month energy coal production was steady at 21 million tonnes, while iron ore production for the same period was up three per cent to a record 171 million thanks to additional capacity in the Pilbara and productivity improvements. RBC Capital markets analyst Paul Hissey said the alister.thomson@news.com.au VEHICLE parts company Automotive Solutions Group has downgraded earnings targets due to weaker-than-expected revenue and consumer demand.
Shares, which listed at $1, plummeted 62.74 per cent, or 48¢, to 28.5¢ after the company revised its 2H17 revenue guidance.
The company said revenue would be between $15 million and $16.5 million, down from $21.5 million, and pre-tax earnings between $800,000 and $900,000, down from $3.3 million.
Brisbane-based ASG, which has an office at Robina, listed last year. It formed after the merger of eight 4WD parts companies – making or selling everything from tow bars to engine parts – including Queensland-based Roo Systems and Victoria-based Barden Fabrications.
The company said it was hit by competitive pressure at its two Umhauers 4WD accessories shops in Victoria and a reduction in revenue from steel fabrication at Barden after order deferrals.
ASG chief executive Tanya Mason said the company had challenges to overcome but believed it could build a successful and profitable network of businesses and brands.
She expects the company’s financial position to improve in FY18 through cost-cutting measures and expansion of product lines at Umhauers. It also will carry out marketing campaigns. March quarter had been softer than RBC had estimated.
“Much of this was to be expected, with the industrial action at Escondida ... and weather impacts on both the west (iron ore) and east (metallurgical coal) coasts of Australia previously flagged by Rio Tinto and Fortescue Metals,” Mr Hissey said.