BHP Billiton, the world’s biggest mining company, just posted full year attributable profit of $US1.91 billion (£1.21 billion), down 86.2% from last year’s $US13.832 billion (£8.77 billion), below analyst expectations.
Attributable profit excluding exceptional items was $US7.109 billion (£4.51 billion), down 47.1%. Revenue was down 22% to $US52.267 billion (£33.14 billion). Net debt fell 5% to $US24.4 billion (£15.47 billion).
BHP has been cutting costs and increasing production to meet falling commodity prices.
The world’s biggest miner increased full-year dividends by 2% to 124 US cents a share.
“We will cut costs further and exercise our growing capital flexibility to improve our competitiveness and support our progressive dividend policy,” says CEO Andrew Mackenzie.
The company reported productivity gains of $US4.1 billion (£2.6 billion), two years ahead of target. More cuts are planned for 2016.
Capital and exploration expenditure was down by 24% to $US11 billion in 2015 and is expected to fall by $US8.5 billion (£5.39 billion) in 2016 and $US7 billion (£4.44 billion) in 2017.
BHP has lowered its forecast for peak Chinese steel demand to between 935 million tonnes and 985 million tonnes in the mid 2020s.
“This backdrop will favour low-cost producers with economies of scale,” Mackenzie says.
“Importantly, we do not require the same level of investment to grow as in the past. Improved productivity can further stretch the capacity of our existing operations to increase volumes at very low cost.”
BHP says it can increase the capacity of its iron ore system from 254 million tonnes to 290 million tonnes over time with minimal investment, while making more than $US20 per tonne margin at today’s prices.
The results in detail:
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.