Some good news for the world’s second largest Mining and resource company.
- H1 underlying profit $5.10bn vs $4.54bn exp on sales of $48.08bn
- 2014 capex expected around $9bn, $8bn 2015
- Cost reductions exceed FY 2014 target, has thousands more cost cutting projects
- Reduced headcount by 2200 in H1
- Not looking at any major M&A
- Sees global GDP growth exceeding 3.0% in 2014
- Confident in strong global demand for commodities, fundamentals for iron ore remain strong
- Sees Chinese steel demand to grow by 3-4% this year vs 2013
- Still expects Chinese growth near 7.5%
The main theme of the story is one of cost cutting. Investment and exploration spending is down while cash flow is up. Better production is helping too but with all mining and resource companies you want to see those commodities flying out the pits. It’s a mild positive for the aussie resource industry.
Shares were up as much as 3.1% early in the day.