BHP meets guidance on half year report

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BHP has released its half yearly operational review for 2015, showing productivity improvements as well as being on track for full year guidance for petroleum, copper and coal.

Western Australian Iron Ore guidance was maintained at 270 million tonnes, however total guidance has reduced by 10 million tonnes due to the tailings dam disaster at Samarco in Brazil last year.

BHP Billiton Chief Executive Officer, Andrew Mackenzie, said operated assets had performed well over the past six months.

“The strong performance of our conventional petroleum assets has offset lower shale volumes following a reduction in investment to preserve the value of our acreage in current market conditions,” he said.

“Increased throughput at Escondida helped mitigate the impact of expected grade decline and better productivity supported production at Queensland Coal. These efforts have allowed us to maintain production guidance for Petroleum, Copper, Coal and Western Australia Iron Ore.

With the drop in commodity prices, substantially in the first half of the 2016 financial year, Mackenzie said BHP would continue to cut costs, and remain focused on safety improvements to enhance productivity.

“In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term,” he said.

Underlying attributable profit is expected to be subject to charges of $US300 to $US450 billion, including global royalty and taxation of $US125 to $US175 billion.

Inventory write-downs will be worth $US50 to $US100 billion, while redundancies and closures will cost $US125 to $US175 billion off profit.