BHP focussed on reducing expenditure

BHP Billiton boss Andrew Mackenzie has confirmed plans to cut capital expenditure by 25% this year. Source: AAP

BHP Billiton chief Andrew Mackenzie says his main aim is not growing volumes, confirming plans to cut capital expenditure by 25 per cent this year and further next year.

BHP will also continue to cut costs after reducing controllable cash costs by $US2.7 billion ($A2.97 billion) the 12 months to June 30, he said at an investor briefing in Houston in the US.

The comments highlight the difference in leadership between Mr Mackenzie and his predecessor Marius Kloppers.

When Mr Mackenzie took the reins as chief executive in May it was with a mantra of controlling cost inflation in a world of lower commodity prices.

On Tuesday he reaffirmed plans to increase production by 16 per cent in the 2013/14 financial year and next, but believes the resources giant can grow while returning cash to shareholders and spending less.

"My principle aim is not to grow volumes," Mr Mackenzie said.

"My principle aim is to create value and free cash flow."

Capital expenditure had been allowed to run too high in the past, he said, with a level of $15 billion more appropriate than the $U22 billion spent last year.

Rio Tinto said last week it planned to halve its spend to $US8 billion by 2015.

Of the forecast production growth between now and 2015, 69 per cent will come from iron ore and petroleum.

Those two divisions have dominated capital expenditure in recent years, due to growth in Western Australian iron ore operations and an expansion into US shale oil and gas.

With much of the costly investment work done, capital was falling and output rising in petroleum, Mr Mackenzie said.

He defended the expensive shale assets as a fantastic opportunity for the future.

BHP's energy portfolio, which includes oil, gas, coal and uranium, would also benefit from an estimated two-thirds jump in energy demand from Asia's emerging economies by 2030, Mr Mackenzie said.

Anda sedang membaca artikel tentang

BHP focussed on reducing expenditure

Dengan url

http://writerlovery.blogspot.com/2013/12/bhp-focussed-on-reducing-expenditure.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

BHP focussed on reducing expenditure

namun jangan lupa untuk meletakkan link

BHP focussed on reducing expenditure

sebagai sumbernya