BHP Billiton made better progress on cost reductions in 2013/14 than in any year over the past decade
John Robertson
PortfolioDirect
BHP Billiton made better progress on cost reductions in 2013/14 than in any year over the past decade. However, since 2004/05, costs have risen $8.9 billion while volume gains have contributed just $6.0 billion to EBIT suggesting persist productivity deterioration through the cycle until markets forced a change. Much of the most recent cost reductions came from a 40% cut in Queensland coal cash costs from their peak according to CFO Graham Kerr. At one level, this is a good outcome but, at another, it begs an important question about the management of the company through the cycle. Clawing back old mistakes is less inspiring management than preventing the problems in the first instance. One of the challenges for the new BHP is to show that it is in better operational control than it has been in the past.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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