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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (32197)	2/4/2009 7:27:14 PM
From: LoneClone	Read Replies (2) \| Respond to of 195618

BHP Billiton reports 56.5 per cent fall in six-month profit Wed Feb 4, 5:17 PM The Associated Press ca.news.finance.yahoo.com By The Associated Press MELBOURNE, Australia - BHP Billiton Ltd., the world's biggest mining company, warned on Wednesday of continued volatility in commodities markets and falling demand for its products after reporting a 56.5 per cent drop in first-half profit. Net profit for the six months to Dec. 31 fell to US$2.617 billion from $6.017 billion in the same period a year ago, the Anglo-Australian company said in a statement to the Australian Securities Exchange. BHP Billiton (NYSE: BHP) said commodity price weakness and volatility in commodities markets will continue and that it is witnessing further demand contraction for its products. Chief executive Marius Kloppers said that for conditions to improve within the resources industry, a resurgence in demand from China as well as countries within the Organization for Economic Cooperation and Development would be required. "China alone cannot be relied on to support overall global commodity demand," Kloppers told analysts on a conference call. "For global commodity markets to perform well, a synchronized improvement in both the OECD and China will be required." Melbourne-based BHP Billiton said that during the first half it witnessed an "unprecedented" fall in commodity prices, with market prices falling in the order of 50 per cent. "As the global economy continues to deteriorate, we are witnessing further demand contraction for our products," the statement said. "We believe it is likely that uncertainty will extend into the medium term," it added. The result was dented by mine closures, asset impairments and costs associated with the abandoned bid to take over rival Rio Tinto Ltd. BHP Billiton's profit from operations for the half year fell 23.8 per cent to $7.224 billion, from the previous corresponding period's $9.486 billion. Costs increased by $1.872 billion compared to a year ago. Revenue for the half year increased 16.6 per cent to $29.78 billion, as underlying earnings before interest and tax (EBIT) rose 23.7 per cent to $11.9 billion. BHP Billiton said its operating results were robust given the deterioration in resources markets. "We continue to focus on our cost performance and expect to see the benefits of falling input prices, albeit with some lag," it said. The miner raised its interim dividend by 41.4 per cent to 41 U.S. cents per share. BHP Billiton unveiled an additional $864 million in charges associated with a withdrawal from the Suriname aluminium operations, suspension of copper mining at Pinto Valley in the United States, the write down of the Corridor Sands resource in Mozambique and further rehabilitation obligations at the Newcastle steelworks north of Sydney. This came on top of the expected $3.361 billion write down of the Ravensthorpe nickel mine in Western Australia state, which was closed last month, and the Yabulu refinery in Queensland state. "Our view on the stock is lukewarm at the moment given the potential for further writedowns and further cost pressures," said Gavin Wendt, an analyst with market researcher group Fat Prophets. BHP, with more than 41,000 employees, has operations around the world, including Canada, where it controls the Ekati mine in the Northwest Territories. Ekati is the first diamond mine in Canada and produces about four per cent of global diamond supply by weight. In Wednesday trading on the New York Stock Exchange, BHP shares rose $1.43 to close at US$40.34, a gain of 3.4 per cent.