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BHP Billiton Posts Record $15.4 Billion Profit

Petroleum and iron ore sales boost earnings

The world's biggest miner BHP Billiton on August 18 announced record annual net profits of $15.39 billion, driven by soaring commodity prices and strong Asian demand. The Anglo-Australian resources giant, which was particularly boosted by higher earnings from petroleum and iron ore, beat last year's net profit of $13.42 billion by 14.7% to set an Australian corporate record.

"Demand for raw materials in the emerging market economies has remained strong," BHP said in an annual results statement. "In particular, China remains a key driver of global commodity consumption through its position as a net importer of raw materials," added BHP.

Revenues rocketed 25.3% to $59.47 billion in the 12 months to the end of June, compared with its previous financial year. "We have achieved another year of record earnings, driven by excellent operating performance, cost control and the delivery of high margin growth projects into strong market conditions," it said.

BHP said higher oil prices had helped the results, along with increased prices for iron ore, copper, lead, silver and gold. But it added higher costs, particularly energy, fuel and shipping expenses, had offset some gains.

Underlying profit was up 21% at $24.28 billion during the 2007/2008 fiscal year.

The firm said it expected prices to remain high in the short term, but acknowledged there would be more volatility."The effects of current weaknesses in the developed economies on demand for our commodities should be minimal driven by ongoing strong demand from the emerging economies," BHP said.

Base metals were the biggest revenue spinners, with underlying profit growing 16.2% to $7.99 billion while earnings before interest and tax for iron ore rose 69.8% to $4.63 billion. The company's petroleum division was the second highest earner, bringing in underlying profits of $5.49 billion due to increased production and higher oil prices.

BHP Billiton chief executive Marius Kloppers, added that the group's $150 billion takeover offer for Rio Tinto made "more sense than ever."

"In the context of the longer-term growth, the demand challenges that the world will deliver and the supply challenges that I have described, the combination of BHP Billiton and Rio makes more sense than ever," Kloppers said.

Copyright Agence France-Presse, 2008

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