Resources giant BHP Billiton has increased half year net profit by 83 per cent to a better-than-expected $US8.1 billion ($A8.96 billion).
However, it has lifted its dividend by a less than expected – by two US cents to 59 US cents a share, fully franked.
Underlying net profit – stripping out the benefits of one-off asset sales – was up 31 per cent to a higher than forecast $US7.8 billion.
BHP chief executive Andrew Mackenzie said the strong performance was driven by a substantial improvement in productivity and additional volume from its assets.
It had removed $US4.9 billion in costs with “annualised productivity-led volume and cost efficiencies now embedded”, he said.
That was expected to increase to $US5.5 billion by the end of the fiscal year, he added.
“The commitment we made 18 months ago to deliver more tonnes and more barrels from our existing infrastructure at a lower unit cost is delivering tangible results,” he said.
The reduction in costs contributed to a 65 per cent increase in net operating cash flow, by $US7.8 billion to $US11.9 billion.
The profit was marked by a large jump in iron ore earnings and a fall in petroleum profit.
Iron ore earnings jumped by more than 35 per cent to $US6.5 billion on the back of higher production and prices.
A 16 per cent fall in earnings in the petroleum and potash division to $US2.5 billion was due to
Despite higher sales volumes the business was affected by $US400 million in charges related to the development of its US onshore shale assets including drill rig termination costs.
Mackenzie was positive about the prospects for the global economy this year and what that would mean for iron ore demand for steel production and commodities generally.
“The balance of risk to global growth is skewed to the upside, particularly given the broad based alignment of macro-economic indicators in the major developed economies,” he said.
“In the longer term, the fundamentals of wealth creation and urbanisation should benefit general commodities demand, although the transition to consumption led growth in the emerging economies should provide particular support for industrial metals, energy and fertilisers.”
Iron ore earnings jumped by more than 35 per cent to $US6.5 billion on the back of higher production and prices.
There was a 16 per cent fall in earnings in the petroleum and potash division to $US2.5 billion despite higher sales volumes.
The business was affected by $US400 million in charges related to the development of its US onshore shale assets including drill rig termination costs.
Mackenzie was positive about the prospects for the global economy this year and what that would mean for iron ore demand for steel production and commodities generally.
“The balance of risk to global growth is skewed to the upside, particularly given the broad based alignment of macro-economic indicators in the major developed economies,” he said.
“In the longer term, the fundamentals of wealth creation and urbanisation should benefit general commodities demand, although the transition to consumption led growth in the emerging economies should provide particular support for industrial metals, energy and fertilisers.”
