OREANDA-NEWS. May 22, 2014. BHP Billiton’s CEO, Andrew Mackenzie, reaffirmed the Company’s commitment to creating a simpler, more productive and capital efficient organisation.

Speaking at the Bank of America Merrill Lynch Metals, Mining & Steel Conference in Miami, Mr Mackenzie said the Company was changing the way it worked, using common systems and processes to lift performance across all operations and projects.

“Today you’ll hear me repeat a number of things I’ve said before because maintaining your confidence is about being predictable and consistently delivering on our commitments,” he said.

“We have embedded USD4.9 billion of sustainable productivity gains which will increase to USD 5.5 billion by the end of this financial year.

“In the first half of the 2014 financial year, average truck utilisation, compared with last year, improved by eight per cent. The average utilisation of our diggers increased by 10 per cent, and we have reset the performance benchmark higher so a clear opportunity remains across the Group.

Mr Mackenzie said the Company’s bottom-up, data-driven approach to productivity is sustainable, scalable and a platform from which performance can be raised without limits.

“We have also reduced capital expenditure by 25 per cent and our spend will decline again in the 2015 financial year. By reducing the rate of investment, we have created strong competition for capital, and now expect an average rate of return of more than 20 per cent for our portfolio of low-risk, largely brownfield development options.

“The case for continued simplification of our portfolio is compelling, and this remains a priority. In the last two years we have completed USD 6.5 billion of divestments at attractive valuations. We continue to study the next phase of simplification, including structural options, but no decisions have been made. We will only pursue options that maximise value for BHP Billiton shareholders.

“By doing what we said we would do in the first half of the year, we increased free cash flow by USD 7.8 billion and underlying return on capital to 22 per cent.

“Over the past 10 years, we have built a strong track record of capital management. Today, our balance sheet is strong, and getting stronger. We have a solid A credit rating and our progressive base dividend is comfortably covered by free cash flow.”