Vancouver – BHP Billiton (BHP-N, BLT-L, BHP-A) reports a mixed bag of results in its half-year ending Dec. 31.
While it saw earnings before interest and tax (EBIT) increase by about 24% to US$11.9 billion, its profits from operations slumped by about the same amount to US$7.2 billion.
Inclusion of exceptional items such as impairment charges pushed attributable profits down quite a bit further to US$2.6 billion, 56.5% less than the half-year ending Dec. 31, 2007.
A large chunk of that impairment charge, US$3.4 billion, stems from BHP’s recent closure of its Ravensthorpe nickel mine in Australia and concomitant cessation of nickel cobalt hydroxide production at its Yabulu facility.
BHP also reports costs for the six months ending Dec. 31 were up US$1.8 billion. Much of that, US$592 million, came from higher prices of fuel, energy, coke, sulphuric acid, pitch and explosives, BHP says.
Lower copper output at its Escodida mine in Chile, due to unplanned interruptions and falling copper prices, contributed to a US$333 million reduction in BHP’s EBIT.
Despite cool economic climes, however, BHP remains optimistic in its commodities outlook, putting faith in the developing world’s consumers.
“Whilst the global economy faces significant challenges, our long term outlook remains unchanged. We expect emerging economies’ long term growth to be robust as they continue on the path to urbanization and industrialization,” the company writes.
In the half year BHP spent US$5.9 billion on development projects, three involving oil and gas and one iron ore. BHP spent the bulk of that, US$4.8 billion, on its Western Australia Iron Ore Rapid Growth Project 5.
On news of the financial results BHP’s share price gained US$1.31 to close at $39.01.
More to come
Be the first to comment on "BHP Billiton profits pinched"