The world’s biggest miner, BHP Billiton, said yesterday annual net profit fell 30.2 percent to US$10.72 billion, ending a seven-year run of record results after demand for commodities slumped.
Profit for the year to June was down US$4.67 billion excluding one-off items, down from US$15.39 billion previously. Including exceptional items, profits slumped 61.8 percent to US$5.877 billion.
It also said annual sales were down 16 percent to US$50.2 billion.
The Anglo-Australian company, which has benefited in recent years from a China-driven resources boom, said it had seen a collapse in demand for commodities over the year as the world economy slowed.
BHP described the profit as “as a strong financial result, despite very challenging market conditions.”
It released a cautiously optimistic outlook, saying commodities supply may struggle to meet demand.
“In the long term, we continue to expect strong growth in demand for our commodities,” it said.
Bell Direct analyst Julia Lee said the profit narrowly beat market expectations of US$10.2 billion and investors would be encouraged by signs developing markets such as China were recovering.
“It does look like the outlook statement has been quite positive, saying that they are going to bounce back in countries a lot sooner than expected, especially in emerging markets,” she told Sky Business.
BHP Billiton, created through the 2001 merger of Australia’s BHP and London-based Billiton, has more than 40,000 employees working in 25 countries.
It has more than 100 operations across a range of resources products, including coal, iron ore, uranium, petroleum, nickel, copper, silver and diamonds.
IG markets analyst Cameron Peacock said BHP’s diversity had helped it outperform its rivals during the global downturn.
“To produce a record net operating cash flow of US$18.9 billion against the backdrop of the global financial crisis is certainly impressive and demonstrates the true resilience of the company’s financial strength,” he said.
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