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Annual Results

BHP Billiton posts $5.9bn profit

22 August 2017 07:17

BHP Billiton swung into the black in the year to the end of June with an attributable profit of $5.9bn against a loss of $6.4bn last time and announced plans to sell its onshore US assets.

Underlying EBITDA rose by 64% to $20.3bn with an underlying return on capital employed of 10% (after tax) for the 2017 financial year.

Other highlights:

- Productivity gains(iv) of US$1.3 billion achieved for the period, with more than US$12 billion accumulated over the last five years. The group said it expected to deliver a further US$2 billion by the end of the 2019 financial year, with gains weighted to the second year. - Net operating cash flow of US$16.8 billion and free cash flow of US$12.6 billion were underpinned by higher commodity prices, strong operating performance and improved capital productivity. -Capital and exploration expenditure reduced by 32% to $5.2 billion, as it focused on capital efficient latent capacity projects and exercised flexibility in our Onshore US plans. It said capital and exploration expenditure was expected to increase to US$6.9 billion in the 2018 financial year as it focus on its suite of low-risk, high-return latent capacity projects, progress Mad Dog Phase 2 and the Spence Growth Option and ramp-up drilling activity in Onshore US.

- Capital and exploration expenditure expected to remain below US$8 billion per annum for the 2019 and 2020 financial years.

- Strengthened our balance sheet, with net debt of US$16.3 billion reflecting strong free cash flow generation and a favourable non-cash movement in net debt of US$0.6 billion. - The Board has determined to pay a final dividend of 43 US cents per share which is covered by free cash flow generated in the current period. Total dividends of US$4.4 billion determined for the 2017 financial year include US$1.1 billion in additional amounts over and above the 50% minimum payout policy. Chairman, Jac Nasser said: "Over the last five years, we have laid the foundations to significantly improve our return on capital and grow long-term shareholder value.

"We have reduced unit costs by over 40 per cent and achieved over US$12 billion in productivity gains. Our capital allocation framework provides flexibility at the bottom of the cycle and discipline at the top.

"We have shifted our focus to low-cost, high-return latent capacity projects which has allowed us to reduce capital expenditure by over 70 per cent.

"We strengthened our balance sheet and changed our dividend policy to make sure we have stability and flexibility to create value and reward shareholders in a more volatile environment.

"And we have reshaped our portfolio so that we focus on large, long-life, low-cost assets that will support shareholder returns for decades to come.

"At the end of this month, I leave my role as Chairman knowing these strong foundations, proven strategy and core values position BHP well for the future."

Story provided by StockMarketWire.com

Related Company: BLT

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