Mining giant BHP Billiton has announced its best half year profits since 2014, registering an underlying attributable profit of US$4bn for the six months ending December 2017.
It was good news for shareholders, who received a dividend payout of US$0.55 per share, higher than analysts had previously forecast.
But why did the company enjoy a successful start to the 2018 financial year?
Strong growth in copper and petroleum production are key drivers. In H1, BHP produced 99 million barrels of oil equivalent, up 7% from H1 of 2017.
BHP saw an even greater rise in copper production during the period – the 833 kilotons represents a 17% increase versus the same period in the last financial year. This helped to offset a flatlining iron ore business, which remained at around 177 megatons for H1 2018.
Andrew Mackenzie, BHP’s CEO, said in a statement: “Higher commodity prices and a solid operating performance delivered free cash flow of US$4.9bn. We used this cash to further reduce net debt and increase returns to shareholders through higher dividends.
“We are on track to deliver further productivity gains of US$2bn by the end of the 2019 financial year as we secure improvements in both operating and capital productivity, aided by smarter technology application across our value chain.
“Our capital expenditure programme remains focused on high-return, low-risk development opportunities in commodities where we see greatest potential. We remain firm in our resolve to maximise cash flow, maintain discipline and increase shareholder value and returns.”
These promising financial figures arise shortly after BHP completed a $350mn upgrade of its Olympic Dam smelter.