Revived BHP eyes exit on shale assets
BHP Billiton has flagged an exit from its troubled US shale assets and bumped up returns to shareholders as stronger commodities prices helped it post a solid return to profitability.
BHP made a net profit of $ US5.9 billion ($ 7.4 billion) in the year to June 30, up from a heavy loss a year earlier, and trebled its final dividend from the previous year to US43c a share.
Underlying profit in 2016- 17 rose nearly fivefold to $ US6.7 billion, though still missed analyst expectations of around $ US7 billion.
The resources giant declared its US shale assets as “non- core” and said it was actively pursuing options to exit them, handing a partial victory to activist shareholders agitating for improved returns.
It also pushed back investment in a capital- intensive potash venture in Canada to beyond 2018.
Chief executive Andrew Mackenzie said the decision was in the making for a long time but acknowledged there had been input from shareholders.
“We would like to get on with the exit from shale,” he said. “Our best option at the moment is trade sale but we will keep a number of other mechanisms for exit open, where perhaps the timing could be a little quicker but not quite as value- adding.”
He declined to put a time frame on the divestment, but said plenty of people were interested in “taking a look” at the assets.
BHP has for months been under pressure from activist hedge funds such as Elliott Advisors and Tribeca to restructure its sprawling global operations in order to curb underperformance. HEALTH food business Australian Nutrition Centre is bucking the trend in Townsville, growing sales 40 per cent and cutting overheads as much as 75 per cent as it plans further expansion. But it wasn’t always that way. The business has come through a harrowing period where its former franchise operator fell into administration in late 2015 and their former shopping centre landlords sought to lock them out of the centre’s premises for rent arrears.
“We are grateful that, through adversity, we have learned an enormous amount and we have succeeded by sticking to the principal of looking after our customers,” part- owner Louise Boyle said.
Pharmacist James Jensen and Ms Boyle, who has previous management experience with a large chemist group, launched the small business about four years ago under a franchise of United States- based vitamin retailer GNC LiveWell.
“We found it difficult to trade in the shopping centre because the rent was phenomenal,” Mr Jensen said.
“I was working hard just to pay the bills and, although we were trading well, the rent was crippling.”
Around the same time GNC’s Australian operations were placed in voluntary administration.
The venturers left the franchise and rebranded as Australian Nutrition Centre, while also moving to larger premises at Kirwan where they I see that there is strong growth potential within the health and fitness sector in Townsville and we are an indication of exactly that said the rent was a quarter the cost.
Mr Jensen said their business now was tracking well and they were experiencing good growth despite a slow economy.
Sales had increased 40 per cent since moving to Thuringowa Drive about a year ago.
“I see that there is strong growth potential within the health and fitness sector in Townsville and we are an indication of exactly that,” Mr Jensen said.
“We will open a second store somewhere closer to the city centre probably in the next six months.”
They offer evidence- based natural alternatives to common health problems such as weight loss, digestion disorders, thyroid health, hormone balancing and fertility.
“Our business has two arms. The retail side is a health food store and the other side is a natural health clinic,” Mr Jensen said.
“Because I am a pharmacist, people like the blend of modern medical knowledge with the use of more traditional natural health and herbal options.”