Highlights
Strong and improving cash generation despite lower commodity prices and production volumes
- 2016 first half Adjusted EBITDA of $4.0 billion, down 13%
- Funds from operations of $2.8 billion, down 21%
- Capital expenditure of $1.6 billion, down 51%, comfortably offsetting the reduced FFO
Industry-leading cost positions
- Outstanding first-half operational unit cost performance in our key commodities: copper 97c/lb,
zinc -3c/lb (15c/lb ex-gold), nickel 246c/lb and thermal coal $37/t
- Full year unit cost estimates have been reduced to reflect stronger than expected cost improvements over the year to date
Marketing remains a unique, defensive earnings driver
- Marketing Adjusted EBIT increased by 14% to $1.2 billion, supported by strong contributions from Metals & Minerals
- Full year Adjusted EBIT guidance of $2.4-2.7 billion remains unchanged
Continued strong liquidity and balance sheet flexibility
- Committed available liquidity of $14.9 billion at 30 June 2016 ($15.2 billion at the end of 2015) comfortably covers our next three years of bond maturities
- Public market credit spreads and CDS have substantially normalised
Targeting even lower Net funding and Net debt of $31-32 billion and $16.5-17.5 billion by the end of 2016
- $2.3 billion reduction in Net funding and Net debt during the first half
- Agreed asset sales of $3.9 billion, well on track to deliver the targeted $4-5 billion
- A diverse and material pool of asset sales' processes continues
- Annualised free cash flow generation >$4.5 billion, based on Adjusted EBITDA of c.$10.5 billion at current spot commodity prices
