Tuesday 16 August 2016 by FIIG Research Company updates

Company updates — BHP, Newcrest, Peabody and two new TransAlta DirectBonds

BHP posts a record loss in FY16 and cuts its dividend, Newcrest delivered a solid FY16 result, Peabody received approval of its five year business plan and two TransAlta bonds added to our DirectBond list

BHP released its FY16 results to the market on 16 August 2016

A link to the results is available hereExternal link - opens in a new window. The company reported a record net loss of USD6.4bn, after a long list of impairments, charges and exceptional items.

A brief summary of the results is provided below, and we’ll provide a more detailed comment on the results ahead of next week’s WIRE.

  • Revenue was down 31% to USD30.9bn, underlying EBITDA was down 44% to USD12.3bn, while underlying profit was down 81% to USD1.21bn, although this was 11% better than the USD1.09bn consensus expected by brokers. The significant falls in commodity prices over FY16 have been a key contributing factor to BHP’s weaker result
  • Writedowns on the carrying value of the US shale oil division and costs associated with Samarco dam disaster were among the biggest contributors to the exceptional items tally
  • BHP shareholders have taken a major hit to their income return from the company’s revised dividend policy which states that at least 50% of underlying profits will be paid to shareholders every six months. Over the full year, BHP dividends have been slashed by 76% from USD1.23 in FY15 to USD0.30 in FY16

Please contact your FIIG representative for further information on the BHP US dollar, GBP and EUR bonds. Available to wholesale investors only. 


Newcrest delivers a solid FY16 result and declares full year dividend.

More information is available here.External link - opens in a new window

Peabody’s Australian business plan has mixed impact on coal terminals

On 10 August 2016, Peabody Energy (‘Peabody’) announced that it received approval of its business plan by the company's debtor in possession financing lenders. The business plan forms the foundation for the reorganisation plan the company expects to submit before the end of the year. Earlier this year, Peabody filed for Chapter 11 bankruptcy protection in the US, while continuing to operate its Australian business as a going concern.

Wholesale investors can view the full article here*External link - opens in a new window and retail investors here*.External link - opens in a new window

*Requires a login. If you would like more information on available coal bonds or cannot access the full article, please contact your FIIG dealer.

Two new TransAlta DirectBonds – USD 4.50% 15 November 2022 Senior Unsecured Bond and USD 6.50% 15 March 2040 Senior Unsecured Bond

TransAlta Corporation (‘TransAlta’), headquartered in Calgary, is one of Canada’s largest publicly traded wholesale power generators and marketers. It owns, operates, and manages a highly contracted and geographically diversified portfolio of assets representing nearly 9,000 megawatts (MW) of gross generating capacity across more than 70 facilities in Canada, the US and Australia. TransAlta uses a broad range of generation fuels comprised of coal, natural gas, water, solar, and wind.

On 11 August 2016, two TransAlta bonds were added to FIIG’s DirectBond list. The bonds are both US dollar denominated maturing in 2022 and 2040, with yield to maturities of 4.46%** and 7.30%** respectively. The bonds are available to wholesale investors only, with minimum investments of USD10,000 and denominations of USD10,000 thereafter.

For more information please see the TransAlta 2022 bond factsheetExternal link - opens in a new window or 2040 bond factsheet.External link - opens in a new window

**Note: Prices are indicative only and accurate as of 16 August 2016. Please contact your FIIG dealer for more information on the TransAlta DirectBonds.