BHP today reported a heavily impacted bottom line, with profits falling to $US2.6 billion – although the company’s underlying earnings before interest, tax and amortisation were up 25% year-on-year to $13.9 billion.The company revealed around $4.7 billion worth of impairment charges, including $3.36 billion at Ravensthorpe, which was shut down around two weeks ago.Also starting to take their toll on BHP were falling commodity prices, with the company’s earnings showing mixed results – strong in iron ore and coal, but plunging in nickel, copper and weak in aluminium. Kloppers told journalists and investors this morning the company had a strong balance sheet and excellent assets. “The timing of any recovery is unclear,” he warned, but added the company was well-placed to get through the tough times and take advantage of any upturn. He also steered away from the topic of any further mine closures in the wake of the Ravensthorpe shutdown, saying the company “will continue to act pro-actively and with a high degree of decisiveness”.BHP would not completely exit any commodities, however, even with commodity price weakness.“We are committed to all of the products we have in our portfolio, including [nickel and aluminium] and petroleum, with no plans to exit any of these at this point,” he said. BHP’s focus would instead be “living within its means” and adjusting capital spending to suit the tough climate. Given this statement, the company’s expansion plans in Australia and around the world are also coming under scrutiny.Regarding the massive Olympic Dam operation in South Australia, Kloppers did not say whether its expansion would go ahead.However, he did say the miner was “throttling back the burn rate” on cash spend at the project, given the expansion studies had been finalised. He said the company was now waiting on the environmental impact statement with the South Australian government and the timeline for environmental approvals was unclear. The company recently axed 200 jobs from the massive mine as it slowed work on the expansion. With iron ore growth in the Pilbara, Kloppers said its Rapid Growth Program 5, which will add another 50 million tonnes of iron ore production, was set in stone but beyond that – the proposed RPG6 and Quantum expansions – nothing was finalised.“We would expect to bring [RGP5] as quickly as we can,” he said. “Obviously the ones beyond that we haven’t approved yet.”Shares in BHP fell to $29.40 early but recovered to $30.15, in early afternoon trade today.
