Maximize cash flow: strong operating performance and robust free cash flow with a profit margin of 59%
The current period's operating performance was strong, with the production of the Western Australian Iron Mine (WAIO) and the (Escondida) Copper Concentrator in Escondida both a record.
The group's operating profit increased by 17% to US $9.8 billion. Profit before interest, tax, depreciation and amortisation for the current period (EBITDA) was $14.7 billion, with a profit margin of 59 per cent. The annual unit cost guidance target for all major assets of the Group remains unchanged (calculated at the guiding target exchange rate).
Distributable profit was $3.9 billion (including a special loss of $2.2 billion, mainly due to the impairment of New South Wales thermal coal (NSWEC) and related deferred tax assets, as well as impairment charges for Colombia's Cerrej ó n thermal coal mine). Operating profit for the period was $6 billion, an increase of 16% over the same period last year.
Net operating cash flow reached $9.4 billion and free cash flow was $5.2 billion, reflecting rising iron ore and copper prices and the group's strong operating performance.
Capital allocation: the Spence copper mine expansion project (Spence Growth Option) went into production smoothly as planned, and the balance sheet remained strong.
Capital and exploration expenditure was $3.6 billion. As a result of the rise in the Australian dollar, we raised our guidance for fiscal year 2021 by US $300m to US $7.3 billion. The guidance for fiscal year 2022 remains unchanged at approximately $8.5 billion (at the target exchange rate).
The Group's four major projects under construction are progressing steadily as planned. (Spence Growth Option), the Spence copper mine expansion project, was successfully put into production in December 2020 as planned. The construction of the (South Flank) project in Nanpo Iron Mine is progressing smoothly and is scheduled to be put into production in mid-2021.
On the oil side, the Group completed the acquisition of an additional 28% interest in Shenzi Oilfield, an asset with high quality resources and growth potential.
In terms of exploration, we continue to expand our future-oriented commodities and increase our reserves for early-stage projects. We have signed an agreement to carry out nickel exploration in Canada and an option agreement for the (Elliott Copper Project) copper project in Elliott, Australia.
The group's balance sheet was strong, with net liabilities of $11.8 billion. Free cash flow remained strong throughout the first half of the fiscal year.
Value and return: the dividend hit an all-time high of $1.01 per share in the first half of the fiscal year. Return on capital (ROCE) increased to 24%.
The board decided to pay an interim dividend of $1.01 per share (a total of $5.1 billion), equivalent to 85 per cent of the current dividend yield.
We are divesting from the BHP Billiton third well Coal (BMC), New Wales Thermal Coal (NSWEC) and Colombia Cerrej ó n Thermal Coal projects as planned, and the Group is conducting extensive due diligence to assess spin-off and sale opportunities.
The return on capital ((ROCE)) for the current period increased further to 24%.
Han Murui (Mike Henry), chief executive of BHP Billiton, said:
In the first half of 2021, BHP Billiton achieved a series of strong results. Thanks to continued solid operating performance in the first half of the fiscal year, the production of Western Australian Iron Mine (WAIO) and the processing capacity of the (Escondida) Copper Concentrator in Escondida both set a record.
The group's operations generated strong cash flow, the return on capital increased to 24%, our balance sheet remained strong, and our net debt was at the lowest of the target range. The board declared a record semi-annual dividend of $1.01 a share. So far, BHP has returned more than $30 billion to shareholders over the past three years.
I would like to thank all the employees and contractors of BHP Billiton for their perseverance and perseverance in the face of the epidemic. At the same time, I would also like to sincerely thank all sectors of the community, suppliers, customers, the government and the aborigines of the mining area for their long-term support. Their efforts and efforts are the cornerstone of BHP's strong performance.
In the first half of the fiscal year, the value of the group's business increased further. We have realized the smooth commissioning of (Spence Growth Option), a production expansion project for Spence copper mine, and completed the acquisition of additional rights and interests in Shenzi oilfields. The Group's major projects in the areas of iron ore, oil and potash are also progressing smoothly as planned.
Future-oriented commodities remain a priority for BHP Billiton, and we will create and acquire more project options. In the nickel and copper business, we have established and expanded new partnerships, completed new mining rights acquisitions, and made steady progress in exploration.
We remain optimistic about the prospects for global economic growth and commodity demand. Across the world's major economies, policymakers have shown a strong determination to promote growth and an ambitious vision to combat climate change. These factors, coupled with population growth and rising living standards, will continue to drive demand for energy, metals and fertilizer products.
Our leadership team is poised to lead the group towards the goal of safer, lower cost and higher productivity. BHP Billiton is maintaining good momentum, and our portfolio provides the world with indispensable resource products to help the world move towards a cleaner and more prosperous tomorrow, while generating sustainable returns for our shareholders. continue to create important value for the community.
