Monday 27 February 2017 by Company updates

BHP announces its 1H17 results

BHP Billiton posted strong results for its first half 2017, driven by higher prices and further cost efficiencies

The following table summarises 1H17 results:

$m 1H FY17 1H FY16 %
Underlying EBITDA 9,896 5,944 65%
Underlying EBITDA margin 54% 40%
Underlying EBIT 5,982 1,342 346%
Underlying attributable profit 3,244 412 687%
Net debt 20,057 25,921 (23%)
Gearing 24.3% 30.3%  
Source: BHP, FIIG Securities

Results summary:

  • 1H17 underlying EBITDA was up 65% at US$9.9bn per corresponding period (pcp), with margins at 54% compared to 40% pcp. The strong underlying EBITDA was attributable to higher commodity prices, lower operating cash costs and other net movements, partly offset by unfavourable movements in currency and inflation
  • Most business segments reported stronger underlying EBITDA, with the exception of BHP’s petroleum business segment, as shown in Figure 1:

Figure 1
Source: BHP
  • Net operating cashflow improved by 46% to US$7.7bn in 1H17 on the back of higher commodity prices, further cash cost efficiencies and lower capital, and exploration expenditure of US$2.7bn (down 38% pcp). This generated an increase in free cashflow US$5.8bn in 1H17 compared to US$1.2bn pcp
  • Net debt reduced to US$20.1bn at 31 December 2016 (US$26.1bn at 30 June 2016, US$25.9bn at 31 December 2015) primarily due to strong free cashflow generation. Consequently, gearing fell to 24.3% at 31 December 2016 (30.3% at 30 June 2016, 29.7% at 31 December 2015).
  • The company maintained a minimum fifty percent dividend payout policy and announced a US$0.40 per share interim dividend (compared to US$0.16 per share pcp), which will be funded from free cashflow


Key highlights from BHP’s guidance for the group:

  • Capital and exploration expenditure are expected to be at US$5.6bn and US$6.3bn for FY17 and FY18, respectively
  • Total copper production for FY17 is under review due to ongoing industrial action at Escondida

A link to the results is available here.External link - opens in a new window