Vancouver — A turnaround in its mineral division and a strong performance from the oil-and-gas sector helped Australian-based mining giant BHP (BHP-N) post profit of US$14.1 million for its third quarter, which ended March 31, compared with a loss of US$23.9 million in the same period a year-ago.
“Excluding the A$811-million charge related to HBI Venezuela, the quarter profit was a very solid A$838 million,” says Paul Anderson, BHP’s CEO.
He says the good result was driven by the benefit of lower exchange rates between the U.S. and Australian dollars and a strong financial performance from the company’s minerals and petroleum businesses.
The major’s oil-and-gas division posted a 65% jump in profits to A$547 million in the quarter. This included a A$43-million gain on the sale of part of BHP’s interest in the Ohanet petroleum project in Algeria and a A$30-million gain on the sale of its stake in the Buffalo oil field in the Timor Sea.
The minerals division turned a profit of A$83 million, compared with a A$496-million loss a year ago.
“Industry dynamics remain favourable for the fourth quarter, with continued solid demand for our petroleum products and key minerals commodity markets of iron ore and coal,” says Anderson.
Currency fluctuations gave the company a A$190-million boost in the recent quarter, compared with a year ago.
Hurting the company’s bottom line during the quarter was a A$811-million charge on the previously announced writeoff of BHP’s Hot Briquetted Iron Plant in Venezuela. The company also saw profits plunge to A$76 million from A$139 million a year ago. The drop is attributed to lower prices, as well as higher costs from strike action at the Port Kembla plant in New South Wales.
“These results, combined with the announcement of our merger with Billiton and the approval of several important growth projects, set the stage for continued evolution of BHP,” says Anderson.
One of the growth-oriented projects is the proposed acquisition of an additional 29% equity stake in the Ekati diamond mine in Canada’s Northwest Territories through a A$897-million offer for Dia Met Minerals.
“Upon completion, the acquisition will enable BHP’s current marketing and branding initiatives for Ekati diamonds to be pursued on a larger scale and will also consolidate ownership of this asset,” says Anderson.
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