BHP reports strong underlying operational performance for the half-year ended 31 December 2020, with record production achieved at Western Australia Iron Ore (WAIO) and record average concentrator throughput delivered at Escondida.
Profit from operations of US$9.8 billion, are up 17%. Underlying EBITDA of US$14.7 billion at a margin of 59%, with full year unit cost guidance is unchanged for BHP’s major assets (at guidance exchange rates).
Attributable profit of US$3.9 billion (includes an exceptional loss of US$2.2 billion predominantly related to the impairments of New South Wales Energy Coal (NSWEC) and associated deferred tax assets, and Cerrejón). Underlying attributable profit of US$6.0 billion is up 16% from the prior period.
Net operating cash flow of US$9.4 billion and free cash flow of US$5.2 billion reflects higher iron ore and copper prices and strong operational performance.
Guidance for the 2021 financial year has increased by US$0.3 billion to US$7.3 billion due to a stronger Australian dollar. Guidance for the 2022 financial year remains unchanged at approximately US$8.5 billion (at guidance exchange rates).
BHP’s four major projects under development are progressing well, with first production achieved from the Spence Growth Option (SGO) on time and budget in December 2020. South Flank is on track to deliver first production by mid-calendar year 2021, and remains on budget.
In petroleum, BHP completed the acquisition of an additional 28% interest in Shenzi, a tier one asset with optionality.
In exploration, BHP continues to add to its early stage optionality in future facing commodities, with a signed agreement for nickel exploration in Canada and an Option Agreement for the Elliott Copper Project in Australia.