Via Deutsche:
Remains a FCF and de-gearing story near term
BHP has reported 1H FY17 underlying NPAT of US$3.2b and EBITDA of US$9.9b, slightly above our US$3.0b and US$9.8b estimates respectively. Operating cash flow was strong and net debt decreased by US$6b HoH to US$20.1b, but was assisted by a US$2b non-cash benefit. Capex guidance has been increased slightly but is mostly due to higher stripping at Escondida. Growth projects were highlighted, but these still seem long dated, and the near term focus remains on debt reduction. We model little growth in Cu Eq terms over the next decade due to declining oil volumes. We have reduced earnings on higher costs at Escondida and OD. HOLD on valuation.