BHP reported a return to profit

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BHP reported a return to profit on Tuesday as strong commodity prices helped it bounce back from a large loss last year, with the mining giant also flagging the sale of its US shale assets.

The world’s largest miner recorded an annual net profit of $5.89 billion for the year to June 30 after a $6.39 billion loss in the previous period, just under analysts’ expectations, reports BSS.

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“Over the last five years, we have laid the foundations to significantly improve our return on capital and grow long-term shareholder value,” BHP chairman Jac Nasser said.

Underlying profit, which strips out one-off write-downs, was also below forecasts at $6.73 billion. The Anglo-Australian firm rewarded shareholders with a final dividend of 43 cents compared to 14 cents last year.

BHP said it had determined its onshore US shale operations were “non-core” to the business and it was “actively pursuing options to exit these assets for value”.

The announcement follows a push by New York-based Elliott Advisors, a significant shareholder in the company, for BHP to restructure the business, including spinning off its US oil and gas operations. BHP had previously rejected Elliott’s proposals in April.

BHP, like other miners, has benefited from the rebound in key metals prices after a slump caused by supply gluts and a slowdown in growth in the world’s top commodities consumer China.

The price headwinds in recent years had led BHP to tighten its belt, and on Tuesday it said it had achieved productivity gains and cost cuts of $1.3 billion for the reporting period.

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