BHP Billiton boss Andrew Mackenzie is confident the mining giant can bounce back in a big way over the next 12 months, after reporting a massive loss in the 2015/16 financial year.
BHP reported a statutory loss of US$6.235 billion (A$8.1 billion) in the twelve months ending June 30 this year.
The loss was driven by significant write-offs and other one-off impairments, along with weaker prices across all of BHP’s major commodities, which led to a 44% drop in the ASX-listed miner’s underlying EBITDDA to US$12.34 billion.
After a tumultuous stretch, Mackenzie said commodities prices would likely stabilise.
The BHP boss on Tuesday said the miner was confident in its commodity mix in the long term.
“The last 12 months have been challenging for both BHP Billiton and the resources industry,” Mackenzie said.
“Nevertheless, our results demonstrate the resilience of our portfolio and the diverse ways in which we can create value for shareholders despite low commodity prices.”
During his time at BHP, Mackenzie has led a US$10 billion cost-cutting and productivity gains campaign. Despite only reporting US$437 million in gains from this program in 2015/16, Mackenzie is confident the campaign will pay off for BHP in the long run.
“Unit cash costs across the group declined 16% and with increased capital efficiency, supported free cash flow generation of US$3.4 billion despite weaker commodity prices,” he said.
In 2016/17, Mackenzie is expecting another US$1.8 billion of productivity gains, generating another US$7 billion of free cash flow.
“Over the past five years we have actively reshaped our portfolio,” he added. “We are confident we have the right mix of commodities, assets and opportunities to create substantial value over time.
“While commodity prices are expected to remain low and volatile in the short to medium term, we are confident in the long-term outlook for our commodities, particularly oil and copper.”