UPDATE: BHP Billiton FY09 Profit Falls 61.8% To US$5.88 Billion
August 12 2009 - 3:28AM
Dow Jones News
BHP Billiton Ltd. (BHP.AU) said Wednesday its full year net
profit fell 61.8% to US$5.88 billion from US$15.39 billion last
year, breaking a run of six consecutive record annual results for
the world's biggest miner as a slump in commodity prices took its
toll.
However, the profit came in slightly ahead of market
expectations and the mining giant has eschewed any capital
management to build on the balance sheet strength that marks it out
from its peers.
BHP posted attributable profit excluding exceptional items for
the 12 months ended June 30 of US$10.72 billion, down from US$15.37
billion in fiscal 2008 but ahead of average analyst forecasts for
US$10.2 billion.
The miner said the stimulus policies of the Chinese Government
have provided strong support to short-term economic growth but
there remains uncertainty about global economic growth.
"Structural economic problems will take time to correct and may
hold back growth over the medium term," the miner said in a
statement.
Commodities demand from developing nations remains constrained,
BHP said, but a brighter outlook has emerged recently in some
markets.
Commodity restocking in China appears to be complete and demand
from China is now expected to more accurately reflect real end-user
purchasing, BHP said.
There was emerging evidence of demand improving in North
America, Europe and Japan although it was too early to tell if this
was due to restocking or real demand.
In the long term, BHP said it continues to expect strong growth
in demand for the commodities it produces.
"With reduced capital investment over the past year, supply may
struggle to keep pace with demand in the medium term when growth
recovers," the miner said.
BHP's revenue for the year fell 15.6% to US$50.21 billion from
US$59.47 billion in 2008 and BHP posted a final dividend of 41 U.S.
cents a share, unchanged from last year and in line with analyst
expectations.
Base metals underlying EBIT fell 83.8% on year to US$1.29
billion, aluminum earnings slumped 86.9% to US$192 million and
stainless steel materials earnings tumbled 167% to a loss of US$854
million.
But this was partially offset by higher prices won for bulk
materials, with iron ore earnings rising 34.5% to US$6.23 billion
and metallurgical coal earnings rising five fold to US$4.71
billion.
Costs increased by US$2.5 billion on the prior year as the miner
cut volumes in response to falling demand.
Significant items ate into the headline profit, including an
impairment charge of US$3.62 billion on the Ravensthorpe mine in
Western Australia, which BHP closed after sagging nickel prices hit
margins.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com