[Ferro-Alloys.com]BHP increased by 3.4% after it reported better-than-expected operating results for the first three quarters of fiscal 2015 (ended Mar 31 2015) on April 22, 2015.

In the first nine months of fiscal 2015, the company’s Group production increased 9%, wherein record productivity was achieved in terms of 5 commodities and 10 operational facilities.

During third-quarter fiscal 2015, BHP Billiton achieved double-digit year-over-year growth in the productivity volumes of copper, iron ore, energy coal, manganese ores and manganese alloy. However, aluminum and nickel volumes failed to surpass the respective year-ago tallies by 14% and 5%, respectively.  

In the quarter, the company’s iron ore output was 58,979 kilotons, up 20% year over year, while the same for manganese ores was 2,049 kilotons, increasing 14% from the year-ago tally. Improved production in Western Australia, efficient performance of the company’s integrated supply chain process and good ramp-up of Jimblebar mining hub supported growth in the company’s iron ore productivity. On the other hand, the year-over-year improvement in manganese ores was supported by increased productivity in the company’s Wessels, Mamatwan and GEMCO facilities.

The company’s copper production too, witnessed a year-over-year uptick of 11% attributable to improved yield in the company’s Escondida and Pampa Norte facilities. Energy coal volumes also enhanced 11% year over year on the back of better operational performance, optimized mine plans and excellent South African energy coal production. Growth in the yield of manganese alloy was driven by superior smelting activities.  

However, the company’s aluminum production declined 14% year over year due to cessation of smelting actions in Bayside, transformer replacement at Hillside and temporary suspension of potlines II and III at Alumar in fiscal 2014. Moreover, lower grades at Cerro Matoso, unorganized outage at Kwinana refinery and shutdown of the Perseverance mine triggered a 5% year-over-year decline in the company’s nickel output.

For full-year fiscal 2015, BHP Billiton expects to produce 230 million tons of iron. Nevertheless, due to anticipation of heavy rain in Northern Chile and electrical failure in Olympic Dam, the company has lowered its copper productivity guidance by 6% to 1.7 million tons.

After declaring impressive operating results for the first nine months of fiscal 2015, BHP Billiton targets to achieve 16% Group production growth by the end of 2015 financial year, as planned previously. Despite an unfavorable pricing environment, the company aims to improve its productivity and increase shareholders’ value in the near term, supported by a low-cost business management system and highly productive assets base.

With a market capitalization of $122.96 billion, BHP Billiton currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Golden Minerals Co. AUMN, Solitario Exploration & Royalty Corp. (XPL and Uranerz Energy Corp. URZ. All three stocks carry a Zacks Rank #2 (Buy).

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