mining giant bhp\s firsthalf profit soars 83
Last Updated : GMT 18:08:33
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Mining giant BHP\'s first-half profit soars 83%

Arab Today, arab today

Arab Today, arab today Mining giant BHP\'s first-half profit soars 83%

Sydney - AFP

Global mining giant BHP Billiton Tuesday posted a "monster" 83 percent first-half spike in net profit to US$8.1 billion on the back of spending cuts and strong production at its iron ore business. The result for the six months to December 31 was above expectations and compared to US$4.2 billion in the previous corresponding period, with revenues climbing 5.9 percent to US$33.95 billion. Underlying earnings -- which exclude one-off writedowns -- rose 31 percent to a higher than forecast US$7.8 billion, with the world's biggest miner declaring an interim dividend of 59 cents a share, up 3.5 percent from a year ago. The numbers helped push BHP's share price 2.29 percent higher, closing at Aus$38.89. "A monster result from BHP Billiton, along with good outlook commentary, added to the upside rise," IG Markets strategist Stan Shamu said. BHP chief executive Andrew Mackenzie said the bumper performance was driven by improvements in productivity and extra volume from its assets. He said the Anglo-Australian company, which has scaled back or postponed tens of billions of dollars of investments in recent years as commodity prices slumped, had slashed operating costs by US$4.9 billion in the past 18 months. "The commitment we made 18 months ago to deliver more tonnes and more barrels from our existing infrastructure at a lower unit cost is delivering tangible results," he said. "Annualised productivity-led volume and cost efficiencies totalling US$4.9 billion are now embedded and this is expected to increase to US$5.5 billion by the end of the 2014 financial year. "With strong free cash flow, selective investment and continued simplification, we are well placed to extend our strong track record of capital management," he added. - Record output - The company said there had been stellar performances across its diversified portfolio, delivering a 10 percent increase in production, with records achieved across three commodities and 10 operations. Iron ore output from the resource-rich Pilbara region in Western Australia achieved a record 108 million tonnes in the six months, benefiting from the early delivery of first production from its Jimblebar mine. The steel-making ingredient remains BHP's most lucrative commodity, and the robust production results helped boost iron ore earnings by more than 35 percent to US$6.5 billion, despite weather-related downtime and an increase in planned maintenance. BHP's Queensland coal operations also posted record output while petroleum liquids production increased nine percent to 50 million barrels of oil equivalent. Copper production jumped six percent to 843,000 tonnes. The company also benefited from a lower tax rate, with deferred assets associated with Australia's mining profits tax reducing what it had to pay by US$491 million. In a statement, BHP said the global economy was expected to strengthen over the rest of the 2014 financial year, providing continued support for commodities demand, "albeit at more moderate rates of growth". "In the longer term, the fundamentals of wealth creation and urbanisation should benefit general commodities demand, although the transition to consumption-led growth in the emerging economies should provide particular support for industrial metals, energy and fertilisers," it added. Analysts welcomed the cost cutting and BHP's drive to push down debt, which currently stands at US$27.1 billion, although Goldman Sachs said that despite the solid numbers, it does not see anything "to really drive the stock forward or change market thinking in today's results".

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