BHP has posted profit for the first half, down 47.4% to $US4.265 billion, on falling revenue due to the continuing slide in commodity prices.
Underlying attributable profit was $5.352 billion, down 31%, slightly ahead of expectations.
The result was impacted by $US938 million in impairments.
Revenue fell 11.9% to $US29.8 billion.
Analysts had expected underlying profit of $US5.1 billion, about one-third less than the $US7.8 billion for the same period in 2014, because of falling prices for iron ore which represents more than 40% of the company’s business.
BHP has been cutting costs and increasing output, seeking the make up for the drop in income from falling commodity prices.
Last month BHP announced a 9% increase in group production for the six months to the end of December. Coal is up 23%, iron ore 15% to a record of 124 million tonnes, petroleum 9% to a record 131 MMboe, but copper output fell 2%.
CEO Andrew Mackenzie says BHP is extending productivity gains faster than anticipated with $US2.4 billion achieved over the six months to December. BHP expects more than $US4 billion of productivity gains by the end of the 2017 financial year.
Cost competitiveness continues to improve with unit cash costs reduced by 29% at Western Australia Iron Ore, 15% at Queensland Coal, 13% at Escondida and 8% at Onshore US.
Capital and exploration expenditure has been cut by 23% to US$6.4 billion in the half year.
“These results demonstrate the effectiveness of our strategy and the quality of our people, assets and processes,” says Mackenzie .
“Despite significant falls in the prices of our main commodities over the last six months, group margins remain healthy, free cash flow has increased and we have strengthened our balance sheet. We are confident that we can maintain our progressive dividend policy and continue to selectively invest in projects that offer compelling returns.”
Mackenzie says strong supply growth in iron ore and petroleum contributed to weaker prices in the December 2014 half year.
In China, domestic steel demand was subdued due to weakness in the property sector. In the 2015 calendar year BHP expects Chinese demand to recover moderately, supplemented by healthy demand growth in the rest of the world.
The company announced an interim dividend of 62 US cents a share, fully franked for Australian tax purposes.
BHP shares were trading up 2.2% to $32.84.
Here are the full set of numbers for the first half: