BHP CEO on Results, Commodities Prices, and M&A

The transcript discusses the company's financial performance, highlighting cost reductions and productivity gains. It outlines future financial strategies, including capital allocation and cash flow management. The discussion also covers M&A considerations, market conditions, and capital expenditure plans. The company anticipates market rebalancing in various sectors and emphasizes maintaining efficiency. Investor sentiment is positive, with a focus on long-term growth and asset management.

What was the primary cause of the statutory loss for the company?

• High dividend payouts

• Decline in global commodity prices

• Write-downs from the Samarco disaster and US Shield business

• Increased operational costs

What is the company's strategy for dealing with fluctuating commodity prices?

• Invest heavily in hedging strategies

• Focus on cost reduction and productivity improvements

• Increase production to offset price drops

• Diversify into non-commodity sectors

What is the company's priority for the use of free cash flow?

• Investing in new technology

• Increasing shareholder returns and paying down debt

• Acquiring new companies

• Expanding into new markets

Why does the company prefer internal growth over M&A?

• High risk associated with M&A

• Focus on short-term gains

• Lack of available tier one assets at attractive prices

• Regulatory challenges

What is the company's approach to capital expenditure?

• Allocate all capex to new acquisitions

• Reduce capex to focus on cost savings

• Maintain current levels with slight increases if necessary

• Significantly increase capex for new projects

What market condition is expected for iron ore in the near future?

• Balanced market conditions

• Increasing demand from emerging markets

• Oversupply and low prices

• Tight supply and high demand

How has the company's stock performed in 2016 compared to 2015?

• Increased by 10%

• Remained stable

• Increased by 39-40%

• Decreased by 20%