BHP Billiton (BLT) may have slashed underlying unit cash costs for each of its major commodities, but that matters little when average prices have declined precipitously. And while the Anglo-Australian miner's full-year results were never going to make for easy reading, investors looking for a bullish tone were disappointed by chief executive Andrew Mackenzie’s suggestion that "commodity prices are expected to remain low and volatile in the short to medium term".
The income statement was also hammered by adjustments. After tax allowances, exceptional items wiped $7.7bn (£5.9bn) from the bottom line, thanks to a costly $4.9bn impairment to the company's onshore US shale assets and the $2.2bn in impairments and provisions set aside for last November's iron ore tailings dam failure at Samarco, Brazil. Even on an underlying basis, attributable profit declined by a whopping 81 per cent in the period, explaining the miner's decision to slash the final dividend to 14¢ per share. And while there was no increase in net debt from the half-year stage, this should be seen in the context of a 42 per cent decline in capital and exploration expenditure to $6.4bn.