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Dhaka Friday,  Mar 29, 2024

Mining giant BHP Billiton H1 net profit almost halves

EB Desk

Global mining giant BHP Billiton today said its first-half net profit almost halved to US$4.26 billion on the back of collapsing commodity prices as it reiterated a plan to spin off non-core assets.
The 47.4 percent slump in the six months to December 31 compared to US$8.1 billion in the previous corresponding period, with revenues dropping 11.9 percent to US$29.9 billion.
Underlying earnings-which exclude one-off writedowns-were down 31 percent to US$5.35 billion, slightly better than analyst expectations which helped the share price rise more than two percent to Aus$32.94 in early afternoon trade.
The world’s biggest miner has been hard hit by falling prices for its two
main commodities, iron ore and oil, with a 23 percent reduction in capital and exploration expenditure helping offset some of the damage.
Despite this, the company boosted its interim dividend by 5.1 percent to 62 cents with chief executive Andrew Mackenzie saying the firm had prepared for sliding prices by reining in spending and scaling back investments in recent years.
“Despite significant falls in the prices of our main commodities over the
last six months, group margins remain healthy, free cash flow has increased and we have strengthened our balance sheet,” he said, adding that net debt had been reduced to US$24.9 billion.
“We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment.
“Since then, we have achieved annualised productivity gains approaching US$10 billion and reduced capital spending by almost 40 percent.”
The company said there had been stellar performances across its diversified portfolio with records achieved for eight operations, but this was partially offset by prices tumbling as demand was outpaced by a supply surge for some commodities.
Iron ore-the steel-making ingredient-is BHP’s most lucrative product
and production from its key Western Australian operations jumped 15 percent in the half year to 124 million tonnes.
But the boost came with the economy of major customer China slowing and demand dropping due to weakness in its property sector.
Mackenzie said BHP was positioning itself to weather the iron ore weakness, with the price crashing nearly 50 percent over the past year.
AFP

 

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