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BHP announces results for H1

Mining News - Published on Wed, 20 Feb 2019

Image Source: BHP
BHP Chief Executive Officer, Andrew Mackenzie, said “The collapse of the Brumadinho dam in Brazil is a tragedy and we offer our heartfelt sympathy to all those affected. At BHP, we are committed to learn from what happened, and as an industry we must redouble our efforts to make sure events like this cannot happen. Our focus on portfolio simplification, cash generation and capital discipline delivered higher cash returns to shareholders in the December 2018 half year. Our strong balance sheet and fully funded capital investment plans allowed us to return the US$10.4 billion net Onshore US proceeds to shareholders in the form of a US$5.2 billion off-market share buy-back completed in December 2018 and a US$5.2 billion special dividend paid in January 2019. The Board has also today determined to pay an interim dividend of 55 cents per share, which equates to a payout ratio of 75 per cent. Since the beginning of 2016, we have reduced debt by US$16 billion, reinvested US$20 billion in the business and returned more than US$25 billion to shareholders. A strong second half is expected to partially offset the impacts from operational outages in the first half, with unit costs across our business forecast to improve. We have a portfolio of attractive development opportunities and have recently approved the West Barracouta and Atlantis Phase 3 projects in petroleum and had early success in our oil and copper exploration programs. We are confident in our plans to increase shareholder value and returns.”

Highlights

Tragically we had a fatality at Saraji in December 2018, despite improvements in our safety performance indicators.

Maximise cash flow: Solid free cash flow generation and margin above 50%

Attributable profit of US$3.8 billion and Underlying attributable profit of USD 3.7 billion down 8% from the prior period.

. Underlying EBITDA of US$10.5 billion at a margin(i) of 52% from continuing operations.

Net operating cash flow of US$6.7 billion and free cash flow of US$3.6 billion from continuing operations with volumes and commodity prices broadly in line with the prior period.

Productivity(i) guidance is now expected to be broadly flat for the 2019 financial year largely reflecting the unplanned production outages at Olympic Dam, Western Australia Iron Ore, Spence and Nickel West.

Capital discipline: Net debt reduced to US$9.9 billion and to remain at the lower end of the target range

Capital and exploration expenditure(i) of US$3.5 billion. Guidance unchanged at below US$8 billion per annum for the 2019 and 2020 financial years. This includes investments in the high returning West Barracouta (Bass Strait) and Atlantis Phase 3 (US Gulf of Mexico) projects approved in December 2018 and February 2019, respectively.

Source :

Posted By : Rabi Wangkhem on Wed, 20 Feb 2019
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