On August 21, BHP Billiton's performance report for the fiscal year 2019 (July 1, 2018 to June 30, 2019) showed that BHP Billiton's financial results for the fiscal year achieved steady growth.

EBITDA margin is as high as 53%

In FY 2019, BHP Billiton's Attributable Profit was $8.3 billion, and the underlying attributable profit was $9.1 billion, up 2% year-on-year; operating profit was $16.1 billion, and the current period of continuing operations Earnings before interest, taxes, depreciation and amortization (EBITDA) was $23.2 billion, and the profit before interest, taxes, depreciation and amortization was 53%; the Group's continuing operations achieved $17.4 billion in operating net cash flow and $10 billion in free cash flow. Net debt decreased by $1.7 billion year-on-year to $9.2 billion.

BHP Billiton CEO Ma Anzhe said: "In the past five years, BHP Billiton's production of all major commodities has increased by 10% and unit costs have fallen by more than 20%. In FY 2019, BHP Billiton's iron ore cash cost is less than $13. / ton. However, BHP Billiton's improved operating results for FY 2019 were partially offset by the adverse weather in the first half of this year, the uncertainty of resource development and the impact of unplanned shutdowns."

In FY 2019, BHP Billiton's operating cash flow performed strongly due to the rise in commodity prices and the record high output of some of its operations. The company uses the cash for investment-rich growth projects, promoting exploration projects and improving shareholder returns. “Currently, we have six major development projects involving oil, copper, iron ore and potash. In addition, the Ruby oil and gas development project was just approved in August. All of the above projects are progressing as planned within the budget.” Mai Anzhe pointed out.

China's economic growth is resilient

BHP Billiton also analyzed and forecasted the global economy and related commodity trends in its earnings report. BHP Billiton pointed out that in 2018, the world economy grew at a rate of about 3.75%, with the US economy rebounding significantly and China's economic growth toughness. BHP Billiton expects the world economy to grow at a low rate of 3.25% to 3.75% in 2019. Further escalation of trade protectionism and loss of business confidence will give the global economy, commodity demand, and energy and metals in fiscal year 2020. Price brings downside risks.

BHP Billiton believes that China's economic growth is expected to moderately slow in 2019, about 6.25%. Loose monetary and fiscal policies will partially offset the negative effects of weak exports. Chinese policymakers will continue to find a balance between reforms and maintaining macroeconomic and financial stability. In the long run, China's economic growth is expected to slow down as the working-age population declines and capital stocks stabilize.

The US economy is strong in 2018, but the outlook is uncertain. The impact of expansionary fiscal policies such as US tax cuts will gradually weaken, while trade policy is unpredictable. The economic growth in Europe and Japan has slowed down. The Indian economy will maintain steady growth.

From the perspective of commodity trends, global steel production showed a steady growth in the second half of 2019 (January 1, 2019 to June 30, 2019). As previously expected, the profit margins of steel mills have begun to move from the extremes of China's supply-side structural reforms to normalization. In addition, BHP Billiton expects that the quality differentiation of iron ore will remain a long-term factor in the formation of steelmaking raw material prices.

Since the dam-breaking of the tailings pond in Brumadinho, Brazil, at the end of January 2019, iron ore prices have been strong and the lump ore premium has remained high. In addition to the decline in Brazilian iron ore exports, China's strong pig iron production and Australian hurricanes have had an impact on iron ore prices. BHP Billiton expects iron ore supply to return to normal on a one-to-three-year basis. In the long run, the bottom of the price will be dominated by Australian or Brazilian exporters with higher costs and lower value.

In terms of the global coal market, the price of low volatility and high quality coking coal peaked in the middle of FY 2019 due to tight supply in Queensland, Australia. BHP Billiton believes that coking coal prices will fall from high levels due to weak demand in the European market and improved supply in Australia. In the long run, BHP Billiton expects that demand for coking coal in India will maintain strong growth. High-quality coking coal is expected to continue to bring high use value to steel companies.

From the global nickel market, in the second half of the 2019 fiscal year, nickel prices have been deeply affected by global trade uncertainty. BHP Billiton believes that the recent growth in nickel supply should keep pace with changes in demand in the traditional sector.