A grab bag of positive copper production and flat iron ore results have helped BHP hold on to its full-year production targets and offset poor coal and petroleum output.
But the mining giant warned its earnings would be affected by a writedown of up to US$350 million ($440 million) of a now redundant conveyor system at its Escondida operations in Chile, the world's largest copper mine.
Iron ore production continued to track positively for the company, with production up 11 per cent quarter on quarter, although it remained flat in the December 2017 half compared with the same period in 2016.
Record production volumes at BHP's Jimblebar and Mining Area C mines in Western Australia's Pilbara region were offset by planned disruptions for maintenance and a fire at its Mount Whaleback mine, the largest of seven mines the global miner operates in Australia.
BHP produced 136 million tonnes of iron ore during the half, leaving its fiscal 2018 target unchanged at 275 million to 280 million tonnes. The company is ramping up its systems to be able to produce up to 290 million tonnes of iron ore per annum.
BHP's iron ore figures exclude its Samarco operations in Brazil, which suffered a significant tailings dam failure in 2015, killing 19 people and causing Brazil's worst ever environmental disaster. BHP and its joint venture partner Vale face a US$48 billion settlement for the incident.
Despite this mixed performance, BHP chief executive Andrew Mackenzie remains positive on the company's operations in 2018, flagging production growth of at least 6 per cent overall for the year as the miner takes advantage of stronger commodity prices.
Growth would also be supported by the new US tax laws, BHP said.
While the changing of the US company tax will force a non-cash revaluation of BHP's US net deferred tax assets and lead to a one-off charge in its upcoming financial results, the lowered corporate tax rate is expected to benefit the miner in the longer term.
BHP forecast its adjusted effective tax rate will be below its full-year guidance range of 32 to 37 per cent.
BHP recorded mixed results in its coal business, with its much larger metallurgical or coking coal production seeing a decline, while its smaller thermal coal division increased output significantly.
BHP has lowered its guidance for its coking coal operations due to ongoing operational issues at its Broadmeadow and its Blackwater coal mines. These issues are expected to continue to impact operations at the two Queensland mines through March 2018, affecting unit costs as well.
The miner produced 20,252 kilotonnes of coking coal for the December 2017 half year, dropping its annual target to between 41 million and 43 million tonnes.
Thermal coal was up 8 per cent quarter on quarter, and up 4 per cent for the December 2017 half year from the previous corresponding period, with 14,029 kilotonnes produced during the December half. BHP left its full-year guidance for thermal coal unchanged at between 29 million and 30 million tonnes.
Copper performed well for the company, with production up 17 per cent compared to the previous December half year period, thanks to the ramp-up of BHP's Los Colorados extension project, which caused the writedown of between US$250 million and US$350 million at Escondida.
BHP's US petroleum division continues to be a weight around the company's neck, with its onshore US drill rig count forecast to fall as it plans to drop the assets.
"We continue to progress a number of alternatives to divest our onshore US assets for value," BHP said in a statement, adding that it is "tailoring plans to maximise value in the exit process".
Analysts at Morgans are bullish on BHP in the year ahead and believe the resources sector is in the middle of a multi-year up cycle.
"Miners are enjoying both robust commodity prices and investor sentiment," Morgans investor notes said.
"The promises of higher shareholder returns from BHP have added to their appeal for income-hungry investors."
Fat Prophets analyst David Lennox said BHP's result was generally better than the market saw with its main competitor Rio Tinto, but "there was no real fanfare".
"Much like Rio Tinto, iron ore was flat. The real stand out was copper," he told Fairfax Media.
"Its two coals - metallurgical coal and energy coal - moved in very opposite directions, but the real surprise was that met coal was down and energy coal was up."
He said bullish commodity prices forecast a strong fiscal report ahead.
BHP opened trading at $31.05 and soon rose 0.58 per cent to $31.23 by mid-morning before closing at $30.78.
