BHP issues profit report for year ended May 31, 1997.

MELBOURNE, Australia--(BUSINESS WIRE)--June 27, 1997--The operating profit after income tax for the year ended May 31, 1997 attributable to BHP shareholders was $410 million including abnormal items, a decrease of $636 million or 60.8% from the 1996 result of $1,046 million.

Excluding abnormal items, the profit was $1,386 million, an increase of $93 million or 7.2% when compared to the 1996 result of $1,293 million. The 1997 result takes into account outcomes of a Strategic Review across all the company's Business Groups reflecting changes in global industry structures, growth rates and inflation.

The 1997 result includes a net abnormal loss of $976 million after tax which comprised: $189 million write-down of Minerals' asset portfolio, $550 million write-down of some North American copper assets, $220 million charge for plant closures and labour provisions in Steel, and a $124 million write-down of Petroleum refinery assets partly offset by an abnormal profit of $107 million from settlement of the Petroleum Resource Rent Tax issue with the Victorian Government.

A common factor depressing the results of all Business Groups, in varying degrees, was the higher value of the Australian dollar in terms of the U.S. dollar. Other major factors affecting the operating results of the Business Groups shown below, excluding abnormal items, were:

-- Minerals' profit: $425 million, a decrease of $15 million or 3.4% below last year. The result reflects higher US$ prices and record shipments for iron ore and coal together with a favorable tax adjustment, partly offset by higher costs in the Coal operations and a net loss on asset sales.

-- Copper's profit: $542 million, a decrease of $36 million or 6.2% compared to last year. Lower average copper prices and lower despatches from Ok Tedi were partly offset by record despatches from Escondida.

-- Steel's profit: $353 million, a decrease of $24 million or 6.4% on last year. Lower prices, particularly for export despatches, higher raw material and labour costs, and a higher effective tax rate were partly offset by inclusion of the Tubemakers result for a full year and the positive impact of cost reduction programs.

-- Petroleum's profit: a record $693 million, an increase of $274 million or 65.4% above last year. Higher realized prices for oil, profits from sale of petroleum properties, and favorable tax adjustments were partly offset by increased exploration expenditure.

-- Service Companies' profit: a record $157 million, an increase of $58 million compared to last year. The result reflects lower costs in Power and an improved Transport result.

CONTACT: BHP, San Francisco 

Pierre Hirsch, 415/774-2030