Singapore 20/01/2016 - BHP Billiton's share price sank to a fresh 10-year low on Wednesday after it warned of further impairment charges for its current fiscal year.
Its share price on the Australia Stock Exchange closed 3.5 percent lower at A$14.21 ($9.74).
BHP expects its underlying attributable profit in the half year ended December 2015 to include additional charges of $300-450 million related to redundancies in its oil and coal business, inventory write-downs reflecting weaker commodity prices and global royalty and taxation matters, the company said in its operational review on Wednesday.
It also warned that company earnings before interest and tax in the December half-year will fall by $336 million on a revaluation of copper sales.
These are on top of the impairment charge of around $4.9 billion after tax against the carrying value of its oil assets it had announced last week due to weaker prices in the oil and gas industry.
BHP is also facing hefty fines in billions of dollars after a dam breach at its Samarco joint venture iron ore mine in Brazil in November left 17 people dead. BHP said it was too early to estimate the incident's financial impact on the company.
"Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector. We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business," CEO Andrew Mackenzie said.
"In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term," he added.
BHP had reported a six-percent year-on-year decline in its copper production to 762,000 tonnes in the July-December half, though its copper production guidance for its financial year ending June 2016 remains unchanged at 1.5 million tonnes.