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| Business Description | |
| Company's activities |
BHP Billiton is the largest diversified resources company in the world operating in over 50 countries. Core activities comprise the production and distribution of minerals, mineral products and petroleum. |
| Strategic Analysis | |
| Analysis of company's stated forward thinking |
BHP wants to be the supplier of choice to its end-use customers. Its strategy is three-pronged: build on its diverse reserves base and ensure that best practices are shared quickly across its operations; maintain a steady pipeline of greenfield projects for internal growth; and help increase its pipeline by staying close to customers.Adjusted FY07 NPAT rose 35% to US$13,675m, in line with expectations. Headline profit increased 28% to US$13,416m including a US$142m post tax impairment charge for South African coal operations and a like US$117m charge for rehabilitation of Newcastle Steelworks. The strong result benefited from annual production records for natural gas, alumina, aluminium, copper, nickel, iron ore, manganese ore and metallurgical coal. The key driver was commodity prices which accounted for US$6,122m of the increase in underlying EBIT, after deducting price-linked costs. This compared to only US$586m for volume gains. Cost increases, pleasingly modest, reined the price and volume gains in by US$1,546m. Costs are still increasing but the rate of increase continues to decline.BHP had the privilege of reporting healthy trends across all financial metrics for FY07. EBIT margin improve from 39% to 42%. EBITs improved robustly for all major divisions baring carbon steel materials which witnessed a 6% decline to US$4,240m after lower coking coal prices offset strong iron ore and manganese results. Stand-outs divisions included stainless steel and base metals. The former recorded a four-fold EBIT increase to US$3,697m due to higher nickel and cobalt prices mostly on acquired WMC assets. Higher copper prices propelled base metals EBIT to US$6,905m, a 28% rise. ROIC improved from 27.2% to 30.4%. Net operating cash flow increased from US$10,476m to an even more massive US$15,595m. |
| Last Financial Year End | |
| Reporting period |
30/06/08 |
| Indices | |
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Data and Analysis provided by Huntley Investment Information Pty Ltd
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