Re your comment "So my question is this, with bhp stating as little as three months ago that its still pushing ahead with its expansion plans what impact is this going to have on there bottom line?"
Due to the time delay from expansion plan approval to delivery of extra tonnes, BHP is happy to spend the cash now to be ready for the next upswing in commodity prices.
While I agree that their 08/09 profit will be impacted by falling oil and base metals prices, I would suspect that 09/10 will be much worse due to reduced contract prices for IO and Coal.
BHP is attempting to do a "compare and contrast" with RIO. Think of what has already been announced or implied
RIO announces cutbacks, BHP announces expansions RIO announces flat dividend, BHP continues progressive dividend policy RIO has large debt, BHP announces debt payback
and some of my own thoughts
RIO sells assets and BHP buys them RIO does DRP, BHP does not RIO announces a rights issue, BHP announces a share buyback.
BHP is making sure RIO shareholders are aware of what has been lost by their board rejecting the bid.
HT1
BHP Price at posting:
$31.70 Sentiment: LT Buy Disclosure: Held
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