Share price: R293.18 JSE code: BIL
been BUY outperforming IN GENERAL, the RESOURCES Top 40 index HAVE over the past two years and given the duallisted and rand-hedged nature of these companies, resources companies can be expected to continue outperforming the local index at least for the medium term.
BHP Billiton has managed 52-week highs during October on the back of higher commodity prices, apparently due to the US-China trade war and a weaker rand.
In August, Billiton recorded a 33% increase in underlying profit on ongoing operations and declared a record large final dividend. It has made some drastic changes to the portfolio of assets and mines that it owns to become more streamlined.
This does mean its earnings have been kept down by various one-off charges relating to its restructuring, though those now seem to be out of the way. From here they can benefit from a drastically simpler portfolio of high-quality assets and persistently higher commodity prices.
Billiton has been increasing production across most of the commodities within its portfolio. Copper production is up 32% over the past year, iron ore production is up 3% and coal 7%. The company is also planning to sell its shale business in Arkansas, US for $300m. It intends to either pay the cash out as a dividend or use it to buy back its own shares.