BHP, the world’s biggest miner, sees better profits ahead from US President Donald Trump’s lower corporate income tax rate.
Trump late last month signed a new law, cutting corporate tax to 21% from 35% from 2018.
“BHP is currently working through the financial impacts of the tax reform, which will include a non-cash revaluation of the group’s US net deferred tax assets,” says CEO Andrew Mackenzie in the company’s quarterly update today.
“The financial impact is expected to give rise to an exceptional item in the December 2017 half year financial results.
“Longer term, we expect US attributable profits to be positively impacted by the lower US corporate income tax rate.”
The company’s adjusted effective tax rate for the December half year is currently being finalised and is expected to be below the full year guidance range of 32% to 37%.
BHP says it made final corporate income tax cash payments in Australia of about $US1.3 billion relating to the prior year.
On production, Mackenzie says a strong operating performance in the first half allowed the company to capture the benefit of higher prices.
Copper and energy coal production for the half year was up but iron ore was flat, and petroleum and metallurgical coal down, as this table shows: