BHP Billiton Ltd Revision to production guidance Over the past four years
Revision to production guidance:Over the past four years’, BHP Billiton Ltd (ASX: BHP) company delivered US$11 billion of productivity gains which in turn led to improvement in margins. In FY16, company generated productivity gains of US$437 million and expected strong momentum to continue during FY 17 with US$1.8 billion of gains. Further, these productivity gains contributed to free cash flow of US$3.4 billion and the sustained strength of the company’s balance sheet. As per earlier updates, productivity initiatives were expected to result in production growth of 5% in copper, 4% in iron ore and 3% in metallurgical coal in FY2017, while further gains were expected over the short to medium term by cost reductions, using latent capacity and investing in capital efficient projects. Owing to some adverse conditions, the group recently slashed production guidance for copper, iron ore and coking coal for the 2017 financial year (for instance, guidance for copper production has been cut down by as much as 18% to between 1.33m tonnes and 1.36m tonnes following a 44-day strike at its Escondida mine in Chile).
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