Melbourne, Australia — 21 August 2013 – BHP Billiton Limited, the world’s biggest mining company, has announced that its full-year profit slumped 30% after prices declined.
Net income dropped to US$10.9 billion in the year to June 30 from US$15.4 billion a year previously, the company revealed in a statement. Profit, excluding one-time items, was US$11.8 billion, compared with US$17.2 billion a year ago. That missed a median forecast of US$12.7 billion of seven analyst surveyed by Bloomberg News.
BHP joins Rio Tinto Group and Vale SA in reporting a decline in profit, as slowing economic growth in China saps demand for raw materials, dragging down prices. BHP CEO Andrew Mackenzie is targeting an 18% drop in capital spending this fiscal year as investors including BlackRock Incorporated pressure mining companies to defer expansions, new mines and acquisitions. This comes in the wake of the industry being hurt by more than US$60 billion in write-downs.
“The equity market is looking for the miners to cut spending and increase returns,” Glyn Lawcock, a Sydney-based analyst for UBS AG, said in a report before the results. “It’s been a tough year for BHP.”
BHP fell 1.4% to A$36.54 at the close of trading in Sydney.
Source: Bloomberg News. For more information, click here.