Higher earnings the priority for BHP Billiton chief – by James Wilson (Financial Times – May 8, 2016)


BHP Billiton will set out plans to boost earnings growth this week to woo disgruntled investors and try to dispel the gloom that a fall in commodity prices has cast over the mining industry.

Putting forward a strategy to raise earnings at the world’s largest mining group by market capitalisation has become a priority for Andrew Mackenzie, chief executive, as he seeks to move BHP beyond last year’s defensive measures to withstand the commodities downturn.

Investors dumped shares in miners last year as prices for many commodities fell to some of their lowest levels in a decade. BHP, a big oil and gas producer as well as a miner, was also under pressure as crude prices tumbled alongside iron ore and copper.

While the resources sector has partially rebounded this year, most in the sector expect continued volatility in prices and doubts have been expressed about a sustained recovery. In a presentation to investors on Tuesday Mr Mackenzie is expected to say how BHP intends to increase profits in spite of the downturn.

“Bottom-line growth is the focus,” said a person familiar with the miner. “There is more that we can do than people appreciate to create value for the business.”
BHP’s market capitalisation is down to $70bn, less than one-third of its level at the peak of the commodities boom.

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