Shares in BHP Group (LON:BHP) have fallen deep into the red in today’s session as the blue-chip miner updated investors on its half-year performance, flagging a $600-million charge related to outages. The update comes after Deutsche Bank recently turned bearish on the company, pointing to a more challenging outlook for the Anglo-Australian miner this year.
As of 09:58 GMT, BHP’s share price had given up 1.79 percent to 1,582.20p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.42 percent lower at 6,941.55 points.
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BHP updates on performance
BHP announced in a statement today that its production guidance for the 2019 financial year remained unchanged for petroleum, iron ore, metallurgical coal and energy coal, while its total production guidance for copper was increased to between 1,645 and 1,740 kt. The group’s copper equivalent production meanwhile was broadly unchanged in the December 2018 half year, with volumes for the full year also expected to be in line with last year.
The London- and Sydney-listed miner, however, revealed that productivity during the reported period had been impacted by unplanned production outages at Olympic Dam, Spence and Western Australia Iron Ore, with a total negative impact of approximately $600 million.
“Yes, iron ore output might have been a little softer but overall I’d say production was broadly in line,” a fund manager in Melbourne, told Reuters. “I’d think about the $600 million as more of an opportunity cost that we knew about from earlier in the quarter.”
Analysts on blue-chip miner
Goldman Sachs reaffirmed BHP as a ‘buy’ this month, without specifying a price target on the shares, while Royal Bank of Canada, which rates the company as a ‘sector performer,’ trimmed its valuation on the stock from 1,575p to 1,525p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 1,751.88p.
As of 10:12 GMT, Tuesday, 22 January, BHP Billiton plc share price is 1,581.80p.