BHP Billiton takes a $1.8bn hit from Trump's US tax reform, but says it will benefit over the long term

Lucy White
BHP says the long-term effect will be positive (Source: Getty)

FTSE 100-listed miner BHP Billiton has flagged a $1.8bn (£1.3bn) charge resulting from changes to corporate income tax in the US.

The reform, supported by President Trump and passed by the Senate in December, will load BHP with a non-cash charge on deferred taxes of $898m and an $834m charge on foreign tax credits.

The $1.8bn charge will be treated as an exceptional item. BHP said that in the long term, after the one-off initial impact, the tax change should have a positive effect on its business as the rate of corporate income tax will be lower.

Read more: BHP Billiton to face shareholder questions over strategy

The Australian miner's first-half results are due next week. BHP has recently come under pressure from activist investor Elliott Advisors, which owns a stake in the company, to review and unify its dual-listed status – it currently appears on both the UK and Australia's stock market.

Other companies have also posted initial losses from the US tax reform, although have said it will benefit them in the long term. BP and Deutsche Bank were two of the firms which said they would take a hit initially, though Balfour Beatty and Wells Fargo both said they would cash in.

JP Morgan, meanwhile, announced a spending spree stimulated by the US tax reform which would see it launch new branches and increase wages.

Read more: US tax reforms: AT&T pays extra Christmas bonus to blue collar staff as "monumental plan" is passed

Related articles