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BHP announces $7.8 billion profit

BHP Billiton today announced its financial results for the December 2013 half year, with Underlying EBIT (earnings before interest and taxes) increasing by 15 per cent to US$12.4 billion and Underlying attributable profit increasing by 31 per cent to US$7.8 billion.

BHP Billiton CEO Andrew Mackenzie said the strong performance was driven by a substantial improvement in productivity and additional volume from the Company’s low-risk, largely brownfield investment program.

“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.

“Annualised productivity led volume and cost efficiencies totalling US$4.9 billion are now embedded and this is expected to increase to US$5.5 billion by the end of the 2014 financial year.

“This sustainable increase in productivity supported a 9 per cent increase in the Group’s Underlying EBIT margin to 38 per cent and a strong improvement in the Group’s Underlying return on capital to 22 per cent.”

A 65 per cent increase in net operating cash flow and a 25 per cent reduction in cash outflows from investing activities have driven a US$7.8 billion increase in free cash flow during the period.

“The Group’s opportunity rich portfolio remains a key point of differentiation. By maintaining strict financial discipline and increasing internal competition for capital we intend to further differentiate ourselves by creating a more capital efficient organisation.

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