Connect with us

Hi, what are you looking for?


BHP profit up 72% on emerging market demand

SYDNEY, Feb 16, 2011 – The world\’s top miner BHP Billiton Wednesday said half-year net profits surged 72 percent to $10.52 billion as emerging markets snap up raw materials and the West edges out of its economic slump.

BHP, which was foiled in takeover plans for Canadian fertiliser giant Potash Corp. and an iron ore merger with arch-rival Rio Tinto, also said it would buy back $10 billion in its shares this year.

Chief executive Marius Kloppers said the results came despite BP\’s major oil spill in the Gulf of Mexico and several flood disasters, including widespread inundations in northeastern Australia.

The company said its earnings were reduced by $464 million after the United States suspended drilling when a deadly blast aboard the BP-leased Deepwater Horizon rig caused America\’s worst ever environmental disaster.

"We are proud of the results, despite things like the Gulf of Mexico events and floods around the world," Kloppers told a media briefing.

"The portfolio has shown that it performs at record margins, almost record cash flow, and we have done that in a manner which has been safe.

"We\’re very pleased with what opportunities the market has afforded us and how we have responded to them."

BHP shares closed 1.63 percent lower at Aus$46.59 ($46.95). The profits were in line with analysts\’ forecasts.

The company said supply problems had buoyed prices for its products, which include coal and iron ore bound for industrialising Asia\’s steel mills, while its Western Australian iron ore shipments set a new record.

Advertisement. Scroll to continue reading.

It said operating cash flow was at $12.2 billion, while shareholders would receive an improved interim dividend of 46 US cents.

"An improving economic backdrop and broader supply constraints continued to support the fundamentals for the majority of BHP Billiton’s core commodities," BHP said in a statement.

The company also said it was "cautiously optimistic" about the global economy "given the continuation of robust growth in emerging markets and further positive signs of a sustainable recovery in major developed economies such as the US".

But it added that sovereign debt problems in Europe and growing inflation in Asia posed significant risks.

BHP said revenue for the final six months of 2010 was up 39 percent at $34.17 billion, adding that it planned to spend $80 billion on organic growth over the next five years.

The results also come despite a rocketing Australian dollar, which pared profits, and follow two major setbacks in BHP\’s acquisition programme.

In October, BHP and Rio abandoned a merger of their Australian iron ore operations after anti-competition complaints from regulators and top customers including China.

Just a month later, BHP ditched a $39 billion hostile bid for Potash, the world\’s leading fertiliser-maker, after Canada\’s government ruled it was unlikely to benefit the country.

Kloppers said he would not rule more attempts at a major takeover, but owners of assets were now "ambitious" because of gains in commodity prices, the Wall Street Journal reported.

Advertisement. Scroll to continue reading.

Last week Rio said annual profits had tripled on the back of booming commodities prices and rapid growth in emerging markets, reflecting a halcyon period for mining companies.

"I would say that for the industry as a whole, the conditions over the past six months have been particularly good," Kloppers said.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...