BHP Billiton, the world’s biggest miner, fired a warning over the economic recovery yesterday despite smashing forecasts with half-year profits of US$6.14 billion.
BHP said the global economy had hauled itself out of the doldrums of the financial crisis but cautioned that advanced countries were expected to lag growth in the developing world.
First-half profits to December more than doubled — up 134 percent — from the US$2.62 billion recorded a year earlier, as emergency government stimulus prompted a recovery in demand.
PHOTO: BLOOMBERG
“We remain cautious about the speed and strength of the global economic recovery across the developed world despite the positive momentum in the developed countries,” chief executive Marius Kloppers told reporters.
BHP said strong sales volume growth had boosted its bottom line along with December’s US$340 million sale of the Ravensthorpe mine in Western Australia, the source of a goodwill impairment charge in 2008.
Profit excluding exceptional items fell 7 percent to US$5.7 billion. BHP announced a dividend of US$0.42 per share, up 2.4 percent on a year earlier.
“Given the volatility that we had in the 12 months preceding, we are very pleased with these results,” Kloppers said.
BHP said global conditions had improved with the US and Europe lifting their dismal industrial output while China returned to double-digit growth and India proved resilient.
It said it would keep a close eye on China’s credit-tightening and noted that many of its orders came from restocking, warning that “real end demand still appears sporadic.”
“Notwithstanding our caution in the short term, over the long term we continue to expect emerging economies’ growth to strongly outperform the developed countries as they follow a path of continued urbanization and industrialization,” BHP said.
“Any effects on commodity demand due to potential weakness in developed countries are likely to be offset over time by continuing growth as China and India urbanize and industrialize,” it said.
Kloppers said demand for key steelmaking material iron ore was extremely strong, particularly from China, with prices on the spot market almost double the contracted benchmark price.
“That would indicate that there is extremely strong demand on the back of China’s iron ore imports surprising everybody to the upside in the last six months,” he said.
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