Metallurgical coal production decreased by 6% to 40 million tonnes as a result of the damage caused by Cyclone Debbie to third party rail infrastructure, which was partially offset by record annual production at Peak Downs and Saraji mines. Saraji mine is pictured.
Metallurgical coal production decreased by 6% to 40 million tonnes as a result of the damage caused by Cyclone Debbie to third party rail infrastructure, which was partially offset by record annual production at Peak Downs and Saraji mines. Saraji mine is pictured.

Mining giant back in the black despite CQ cyclone hit

MINING giant BHP Billiton has swung back into the black, posting a massive $A7.42b (US5.89b) yearly profit.

And while the company took a hit from its Central Queensland operations following Cyclone Debbie, it still recorded major improvement.

The company today released its full year results for the 2017 financial year. The profit was in marked contrast to the previous year's loss of US$6.385 billion.

For the giant's coal business, which is dominated by its metallurgical coal operations in the Bowen Basin, the highlights included:

  • An underlying EBITDA (earnings before interest, tax, depreciation and amortization) increase from US$635 million for FY16 to US$ 3.784 billion for FY17. Queensland Coal's EBITDA increased from US$584 million for FY16 to US$3.256 billion for FY17.
  • Average realised price for hard coking coal increased from US$83/t (FY16) to US$180/t. Weak coking coal increased from US$69/t to US$121/t.
  • Metallurgical coal production decreased by 6% to 40 million tonnes as a result of the damage caused by Cyclone Debbie to third party rail infrastructure, which was partially offset by record annual production at Peak Downs and Saraji mines.
  • Metallurgical coal production is expected to increase to 44-46 Mt in FY18.
  • Queensland coal unit cash costs increased by 8% to US$60 per tonne as a result of lower sales volumes due to the impacts of Cyclone Debbie and a stronger Australian dollar.

The company said it would pay shareholders a final dividend of US43c compared with the FY16 payout of just US14c.

BHP Chief Executive Officer Andrew Mackenzie said it had been a strong financial year.

"Free cash flow was US$12.6 billion, our second highest on record,” Mr Mackenzie said.

"We used this cash to reduce net debt by nearly US$10 billion and return US$4.4 billion to shareholders.

"Productivity gains across our simpler portfolio of tier one assets increased our return on capital to 10 per cent.

"This strong momentum will be carried into the 2018 financial year, with volume growth of seven per cent and further productivity gains expected.

"Our relentless focus on cash flow, capital discipline and value creation should allow us to significantly increase our return on capital by the 2022 financial year.”



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