The attributable half-year profit was US$2 billion, including an exceptional loss of $2 billion, mainly relating to US tax reform.

The underlying attributable profit of $4.1 billion missed consensus of around $4.2 billion.

Net debt of $15.4 billion was down 23%, but also a miss on estimates.

Macquarie had tipped net debt of $14.4 billion, while Deutsche Bank had predicted $14.2 billion.

Underlying earnings before interest, tax, depreciation and amortisation  were $11.2 billion, up 14%, while the EBITDA margin was 53%, down slightly from 54%.

“Higher commodity prices and a solid operating performance delivered free cashflow of $4.9 billion,” BHP CEO Andrew Mackenzie said.

“We used this cash to further reduce net debt and increase returns to shareholders through higher dividends.”

The company announced an interim dividend of 55c per share, including an additional amount of 17c per share above the 50% minimum payout policy.

That beat Macquarie and DB’s estimates of 48c and 46.5c respectively.

“We are on track to deliver further productivity gains of $2 billion by the end of the 2019 financial year as we secure improvements in both operating and capital productivity, aided by smarter technology application across our value chain,” Mackenzie said.

That’s despite a negative movement in productivity of $496 million reflecting lower volumes at Queensland Coal and Petroleum and unfavourable fixed cost dilution at Olympic Dam.

“Our capital expenditure program remains focused on high-return, low-risk development opportunities in commodities where we see greatest potential,” Mackenzie said.

“We remain firm in our resolve to maximise cashflow, maintain discipline and increase shareholder value and returns.”