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Dtp iii BHP profit likely
setbacks in steel
MELBOURNE: Equipment and industrial
problems experienced by The Broken Hill
Proprietary. Company Ltd's steel division are
likely to drag down BHP's first-half profit due.,
to be announced on December 21.
But market analysts say the results for the
six months ended November are expected to
show a strong improvement over last year's
first half, when earnings were depressed be
. cause of the slump in the world oil price.
The analysts say the interim results will be
especially interesting this year, because of
• mounting speculation about the future control
ofBHP.
:. They believe Mr,.Robert Holmes a Court's
Bell Resources Ltd; which holds about 29 per
cent: of BHP's issued capital, is,preparing to
make a renewed takeover bid for the group.
; AC Goode analysts predict a first half net
profit of $461.4 million, excluding min'ority
interests,- up about $64 million or 16 per cent
. on the $397.6 million net in the first half of
1986-87,i i i',. ' '
. They predict a full-year profit of about $930
million, compared with"$820.27 million in
1986-87.
Higher production levels and better prices
will boost oil profits, they say.
AC Goode analyst Mr Stuart McKibbin
said he expected BHP's petroleum division to
record a $190 million profit for the first half,
up from $86.1 million in the first half of
1986-87. •
The production report for the year's first
five months released last week showed pro
duction at 33.3 million barrels, up from 29.3
million over the same period last year.
"Production and prices in petroleum arc up
quite significantly compared with the first half
of last year, and especially the first quarter of
last-year, because of the collapse in oil prices,"
he.said.
The drastic reduction in petroleum earn
ings after the oil price collapse was a major
. factor in the drop in BHP's 1986-87 net profit
from its previous record-breaking year.
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