BHP BHP Group Limited

BHP Billiton Ltd., the world's largest listed miner by market value, released its fiscal first-half results on Tuesday. Underlying profit rose 25% to $4.05 billion, and said it will lift its interim dividend by 38% to 55 cents a share.

Here are remarks from the company's report:

On its balance sheet:

"Higher commodity prices and a solid operating performance delivered free cash flow of US$4.9 billion. We used this cash to further reduce net debt and increase returns to shareholders through higher dividends...Our capital-expenditure program remains focused on high-return, low-risk development opportunities in commodities where we see greatest potential. We remain firm in our resolve to maximize cash flow, maintain discipline and increase shareholder value and returns."

On China's outlook:

"Economic growth is expected to slow modestly" this year toward the lower end of the 6.5-7.0% "official GDP target range...as continued strength in infrastructure and resilience in external trade is offset by a cooling of growth rates in the housing and automobile markets."

On world growth:

Global GDP should match the 3.5-3.7% range seen last year in 2018 as "the U.S. economy should see a near-term boost to growth" following the recent tax cuts. "In Europe and Japan, where the limits of monetary-policy effectiveness may have been reached, any upside on growth in the medium term will have to come from external-demand sources. India's economy is on a healthy growth trajectory, supported by positive reform sign posts."

On iron ore:

The overall price gains seen in the last half of 2017 came as "demand for high-grade products remained firm on the back of high steel margins" as Chinese production slowed. "This has resulted in an elevated price differential between high- and low-grade-ore price indexes. In the medium to longer term, ongoing Chinese supply-side reforms, the shift of steel capacity to coastal regions and more-stringent environmental policies are expected to underpin demand for high-quality seaborne iron ore."

On copper:

Its prices also rose into 2018, helped by "continued strength in China [demand], in particular from consumer durables. On the supply side, the announcement that China would ban lower-grade copper scrap imports and the potential for supply disruptions due to the large number of upcoming labor negotiations in South America drove sentiment. Over the next few years, the global copper market is expected to remain finely balanced and vulnerable to supply shocks, particularly in the concentrate segment."

On coal:

After 2H gains in metallurgical prices amid still-strong Chinese demand and constrained domestic supplies, "high prices have incentivized additional seaborne supply from the U.S. and Mozambique. In the medium term, China's coal supply-side reforms and environmental considerations will support demand for higher-quality metallurgical coal."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

February 20, 2018 01:40 ET (06:40 GMT)

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