20 Sep BHP surges back to profit thanks to increased prices and improved productivity
BHP (ASX:BHP) (LSE:BLT) demonstrated a strong financial performance for the last fiscal year returning to profits of US$5.9 billion.
The diversified resources giant’s boost came from a upswing in primary commodity prices and the effects of cot-cutting measures in the downturn taking effect.
The Australian firm increased underlying EBITDA to $20.3 billion from around $12 billion the year before and the free cash flow surged to $12.6 billion thanks to improvements in productivity and capital efficiency.
Andrew Mackenzie, BHP CEO said the results were based on the foundations that had been laid over the past five years ‘to significantly improve returns and grow value’.
The company said it would pay an increased dividend of $0.43 per share, totalling $4.4 billion in pay-outs.
Ken Mackenzie, who replaced Jac Nasser as chairman this year, commended BHP’s management team in bringing about the results.
“After several years of considered and deliberate effort, BHP is stronger, simpler and more productive,” the chairman said. “BHP has a world class management, led by Andrew Mackenzie, and I look forward to supporting them in our pursuit of long-term value creation for all our shareholders.”
Since FY2012 BHP has reduced unit costs across the business by more than 40% which has produced accumulative gains of $12 billion.
The company also reduced its debt burden to $16.3 billion, down $9.8 billion from FY2016.