BHP Billiton, Antofagasta and H&T Group

“Equities opened lower ahead of UK inflation data and European economic sentiment and trade balance figures,” says AJ Bell Investment Director Russ Mould. 

“Mining giant BHP Billiton’s results underline the woes in the commodities sector in addition to the costs of the Samarco dam disaster at its joint venture in Brazil. The $6.2bn loss from operations, though, was widely anticipated and BHP Billiton remains on track to achieve productivity gains of $2.2bn over the two years to the end of the 2017 financial year. Copper, coal, oil and iron ore are BHP Billiton’s key products and its fortunes are inextricably linked to their prices.

“Antofagasta topped the blue-chip board in early trading after first half earnings increased despite an 18.5% fall in revenues. A 24.7% reduction in operating costs more than offset the decline in the copper price and lower sales volumes. The group introduced its ‘cost and competitiveness’ programme in 2014. The programme focuses on four areas: services productivity, operational and maintenance management, corporate and organisational effectiveness and energy efficiency.

“Pawnbroker H&T Group had a strong first half with pre-tax profits up 42.3% at £3.7m. But its shares slipped in early trading after the group warned that the trading environment remains challenging for the sector with most large businesses reporting losses and being forced to significantly restructure their operations. H&T anticipated many of these changes and adjusted its business model and investment approach accordingly and has fared relatively well over the last two years.”

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