-
BHP Billiton - Source: Reuters -
Related
Global miner BHP Billiton Ltd has more than doubled its first
half profit after selling record amounts of key commodities and
keeping a firm hand on its costs.
The world's biggest resources company delivered a 134.4% rise in
net profit for the six months to December 31 to $US6.135 billion
($NZ8.82 billion), from $US2.617 billion previously.
However, the result was inflated by the reversal of an impairment charge for the Ravensthorpe mine in Western Australia booked in the previous corresponding period. Ravensthorpe was sold in December for $US340 million to First Quantum Minerals Ltd.
Excluding one-offs, BHP Billion's net profit was $US5.702
billion ($NZ8.2 billion), down 7% from $US6.128 billion ($NZ8.8
billion) in the first half of 2008/09.
That was stronger than analysts expectations for a an attributable
profit pre-exceptional items of $US5.1 billion ($NZ7.3
billion).
BHP Billiton said its result was "sound" given ongoing volatility and uncertainty in the global economy, but added that commodities supply may struggle to keep up with demand in the medium term.
"Strong sales volume growth on the back of demand recovery, particularly in the steelmaking raw materials and good cost control across the business helped to partially offset the negative impacts of lower prices and stronger producers currencies," it said in a statement on Wednesday.
BHP Billiton said global economic conditions had improved over the past six months, as the US and Europe lifted industrial output from previously depressed levels and China returned to double digit growth.
"Government stimulus measures appear to have supported the restocking activities in the developed economies and a gradual return to normalised global trade," it said.
But BHP Billiton remains cautious about the speed and strength of the global economic recovery across the developed world.
"It appears that stimulus measures that supported the recovery have not fully addressed structural issues such as weak labour markets and excess production capacity in developed economies," it said.
The company said a further variable would be the impact of any
measures to control loan growth in China.
"It is evident that in the short term, the Chinese government will
focus on containing asset inflation," it said.
BHP said commodity markets will continue to be largely dependent on Chinese and Indian demand.
"Real commodity demand in the developed economies remains restrained and the impact of the gradual withdrawal of government stimulus will be a key driver," it said.
"In the long term we continue to expect strong growth in demand
for our commodities."
The company said any effects on commodity demand due to potential
weakness in developed countries was likely to be offset over time
by continuing growth from China and India.
"However, with reduced capital investment in new mining capacity since 2007, supply may struggle to keep pace with demand in the medium and longer term," the company said.
IG Markets analyst Ben Potter said the comment regarding supply "will garner a lot of attention as it bodes well for higher sustainable commodity prices."
"Also, the fact that the result was driven by higher volumes as
opposed to higher prices should please the market."
It declared an interim dividend of 42 US cents per share, compared
to 41 US cents for the prior corresponding period.
Its shares rose 2.63% or $1.05 to $40.90 at 1011.
