Helal Miah, investment research analyst at The Share Centre, said the numbers should not come as too much of a surprise, given that oil prices have plunged 70% since the summer of 2014.
“Investors should acknowledge that at times of lower oil prices, the downstream divisions generally do better. This has helped mitigate the losses from the upstream operations with profits jumping to $7.1bn from $3.7bn,” Shah added.
BHP
Standard & Poors announced on Monday it has lowered its long-term corporate credit ratings on BHP ‘A’ from ‘A+’. It also placed both the long-term ratings and the short-term ‘A-1’ ratings on CreditWatch with negative implications.
The ratings agency also lowered the miner’s senior secured notes to ‘A’ from ‘A+’ and the rating on the subordinated notes to ‘BBB+’ from ‘A-‘. also with a CreditWatch negative.
“The rating actions follow our recent update to our price assumptions for most commodities, including key elements of BHP Billiton’s portfolio such as iron ore, copper, and coking coal,” the firm said.
Adding: “Metal prices have come under pressure because of fears of lower demand from China, and excess supply remains an issue. Moreover, particularly relevant for BHP Billiton, the oversupply of crude oil in the market results in very weak oil and Henry Hub gas prices, which we now believe will last over the foreseeable future, putting further pressure on its balance sheet.”
The FTSE 100 was trading at 5691, down 1.6% at 12h20.
