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The BHP group, the world's largest natural resource company, has abandoned a billion-dollar productivity campaign following a series of incidents, including a major train derailment in Western Australia.
It is a key goal of BHP CEO Andrew Mackenzie to sweat the group's badets to generate higher profits, since taking office in 2013.
However, over the last six months, the Anglo-Australian firm has been hit by a "negative productivity movement" of $ 460 million, following a series of production outages in some of its operations.
BHP revealed last month that it was struggling to reach its efficiency targets after the derailment of a train in Western Australia that reduced iron ore exports by 4 million tons and that problems in two mines affected 58,000 tonnes of copper.
Mr Mackenzie said he expects that a "strong second half" will mitigate the impact of production interruptions by "unit costs of our business forecasts should be strong". improve". However, he said that BHP would no longer achieve its $ 1 billion goal of efficiency gains, already revised.
"I think it's much more possible to turn this company into a stable business unit where everything works like a Swiss watch," said Mackenzie.
"In the last five years, we have already made $ 12 billion in productivity savings. I trust in our transformation program, "he added.
Supply distribution contributed to earnings for the six months ended December compared with market forecasts.
Underlying attributable earnings – the most-monitored measure by badysts – stood at $ 3.76 billion, 8% lower than at the end of June 2018.
"As expected, the underlying result was affected by a difficult operational period," said Tyler Broda, an badyst at RBC Capital Markets. "We expected the market to move away from this slightly weaker set of results."
Net debt stands at $ 9.9 billion, down $ 1 billion from the prior period and below the end of the $ 10 and $ 15 billion BHP target range.
While BHP is about to generate $ 9 billion in free cash flow based on current commodity prices, according to Mackenzie, the company may be able to buy back shares later. this year.
BHP declared a dividend of 55 cents per share, or 75% of earnings. The company has a minimum payout ratio of 50%.
BHP's half-year results are in a context of sharp rise in iron ore prices following the reduction in production of Vale, the world's largest mining company, following the fatal collapse of a dam in Brazil .
"In dealing with the disaster, which is expected to have killed more than 300 people, Mackenzie said that BHP would welcome the establishment of a" joint, international and independent body to oversee the integrity , construction and operation of all tailings dams ".
"As an industry, we must redouble our efforts to ensure that this never happens again," he said.
He added that BHP would meet a number of international bodies this month to speed up the treatment of the tragedy.
"We absolutely support the call for greater transparency in the disclosure of waste rock dams," he said.
Last month, the Anglican Church and fund managers with more than one billion euros of badets called for independent control of the safety of waste rock dykes, used to store the waste from the mines.
Mackenzie said it was "too early to speculate" on the significance of the dam breccia for the future of Samarco, its iron ore joint venture with Vale in Brazil.
The mine is out of service since the collapse of a dam in 2015, which claimed 19 lives.
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