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BHP Billiton profit plunges

Marius Kloppers,
CEO, BHP Billiton
Melbourne, Australia — MININGREVIEW.COM — 12 August 2009 – BHP Billiton Limited “’ the world’s largest mining company “’ reported a 65% decline in profits during the second half of its 2009 financial year, following the plunge in metal prices and demand in the global economic recession.

Net income was US$3.26 billion (R26 billion) for the six months ended June 30, from US$9.4 billion (R75 billion) a year ago, spokesman Peter Ogden told Bloomberg News today after the company’s full-year results were released.

CEO Marius Kloppers cut output of some products and trimmed jobs after commodity prices slumped in the second half of 2008. “The world economy has stabilised while remaining weak,” the company said. “It will be next year before there is a clear picture on commodity demand, after customers finish re-stocking inventories,” Kloppers said.

Full-year underlying earnings before interest and tax were US$18.2 billion (R145 billion), down 25% from a year ago, BHP said in a statement to the exchange. The final dividend was 82 cents a share, up 17% from 2008, the company added.

“In addition to BHP’s proposed US$5.8 billion (R46 billion) iron ore venture with Rio Tinto Group and US$10.7 billion (R85 billion) in capital spending this year, the company would look opportunistically for acquisition opportunities,” Kloppers added.  “Certainly there are things we are looking at right now,” he said.

“While demand in developed markets remains constrained, a brighter outlook has emerged recently from some of the developing markets,” the BHP statement said. “Chinese and Indian demand returned earlier than many expected, as those economies began to re-stock.”