BHP Billiton is the world’s largest mining company and it’s falling apart. The company just announced $1.91 billion (£1.21 billion) in profit, down 86.2% from last year’s $13.832 billion (£8.77 billion).
According to Business Insider, the company’s profit excluding exceptional items was $7.109 billion (£4.51 billion), down 47.1%. Revenue was down 22% to $52.267 billion (£33.14 billion). Net debt fell 5% to $24.4 billion (£15.47 billion).
With falling commodity prices, BHP has been attempting to right the ship by increasing production while cutting costs at every possible juncture.
CEO Andrew Mackenzie told Business Insider, “We will cut costs further and exercise our growing capital flexibility to improve our competitiveness and support our progressive dividend policy.”
After reporting productivity gains of $4.1 billion (£2.6 billion) a full two years ahead of target, the company promised more cuts heading into 2016.
The company also revealed that capital and exploration expenditure was down by 24% to $11 billion in 2015 and is expected to fall by $8.5 billion (£5.39 billion) in 2016 and $7 billion (£4.44 billion) in 2017.
The company also chose to lower its forecast for peak Chinese steel demand to between 935 million tonnes and 985 million tonnes through the mid-2020s.
Essentially the company is betting on an economy that will favor a low-cost producer with the ability to deliver commodities through scale.