BHP Billiton Profit Falls 30%

Collapse in demand for commodities early in the year was partially offset by government stimulus measures, mining firm says.

The world's biggest miner BHP Billiton on Wednesday said annual profits fell 30.2% as commodities demand slumped, ending a seven-year run of record results but still beating market forecasts. Net profit for the 12 months to June was US$10.72 billion excluding one-off items, down $4.67 billion on the previous year as the China-driven resources boom slowed. While the result narrowly bettered the $10.2 billion predicted by analysts, profits including exceptional items plunged 61.8% to $5.877 billion. BHP said it had seen a collapse in demand for commodities early in the year as the world economy slowed, partially offset by government stimulus measures including China's massive 4 trillion-yuan ($585 billion) package. The Anglo-Australian company described the profit as "a strong financial result" in the circumstances, with CEO Marius Kloppers expressing cautious optimism that markets were improving. Kloppers said developed countries such as the European Union, Japan and the United States appeared to be stabilizing and were re-stocking their commodities supplies. In China, he said the stimulus measures had increased short-term demand and BHP was confident about the Asian giant's prospects over the longer term. "Our basic premise is that China continues to have materials-intensive growth over many decades to come," he told reporters. 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. BHP's revenues fell 15.6% to $50.21 billion over the year, with earnings before interest and taxes down 25% to $22.28 billion on the back of lower prices for crude oil, copper, nickel, aluminium and alumina. Operating cash flow stood at a record $18.9 billion. Copyright Agence France-Presse, 2009

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