A tale of two companies

06_A tale of two companies

(Australian Associated Press)

Two of the Australian share market’s most watched companies, BHP Billiton and Qantas, will be in the spotlight when they release financial results on Tuesday.

And they are expected to present two very different stories.

Qantas expects to post underlying profit before tax of between $875 million and $925 million in the first six months of the current financial year.

The strong first half performance comes on the back of its $2 billion Qantas transformation program, revenue growth, and the benefit from lower fuel prices.

“We’ve seen improved revenue in our domestic and international operations, reduced costs across the group, and expect another record half-year result from Qantas Loyalty,” chief executive Alan Joyce said in a recent statement.

Meanwhile, the world’s biggest miner, BHP Billiton, is expected to rein in its progressive dividend policy when it releases its half year results amid tumbling commodity prices.

Ratings agency Standard and Poor’s has cut BHP’s long-term credit rating from `A+’ to `A’ and warns it will be lowered further if the miner continues with its progressive dividend policy while its cash flows are pressured by lower commodity prices.

In January, BHP slightly lowered its iron ore production target and flagged a further $1 billion hit to its bottom line, after earlier writing down $US7.2 billion ($A10.41 billion) in the value of its US shale assets.


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