BHP Billiton Returns to Profit

The world’s largest mining company, BHP Billiton, has reported a considerable rebound in underlying and operating earnings. The firm noted it had profited from soaring iron ore prices and improved productivity.

Anglo-Australian mining giant BHP Billiton said Tuesday it logged a dramatic surge in half-year profits on the back of higher raw materials prices, DW reported.

Underlying profit (excluding one-off effects and other infrequent factors) of $3.2 billion and earnings before tax of $9.9 billion for the final six months of 2016 exceeded analysts’ expectations.

The results marked a 157% increase in underlying profit from a year ago and a 65% year-on-year jump in operating earnings (pre-tax profit).

BHP Billiton’s half-year figures meant a significant turnaround in the company’s fortunes, with the miner posting an annual net loss of $6.39 billion for the year to June 30, 2016, its worst ever result as the firm battled big declines in commodity prices.

Commenting on the much improved performance announced on Tuesday, CEO Andrew Mackenzie said “this is a strong result that follows several years of a considered and deliberate approach to improve productivity and redesign our portfolio and operating model.”

BHP added in a statement that the iron ore market was likely to come under pressure in the near future from moderating Chinese steel demand growth, high port inventories and incremental low-cost supply.

Investors get a dividend payout of $0.52 a share, up by 150% from 2016’s $0.22 a share, better than analysts predicted, ABC reported.

Last year’s result was marred by slumping commodity prices, oil, coal and iron ore were in the doldrums. But huge rises in coal and iron ore prices—because of higher demand in China thanks to policy changes, including production cuts at Chinese mines—saw earnings surge.

Revenue jumped by 20% to more than $24 billion thanks to higher iron ore, coal and oil prices.

BHP Billiton chief executive Andrew Mackenzie said big productivity savings and stronger prices had shaped the result. “This is a strong result that follows several years of a considered and deliberate approach to improve productivity and redesign our portfolio and operating model,” Mackenzie said.