BHP Billiton net profit plunges 29.5% to $10.88 billion
22 Aug 2013 4:49 AM IST
Anglo-Australian mining giant BHP Billiton said on Tuesday that its net profit had slumped 29.5 per cent to $10.88 billion in the year to June, citing slowing global growth and commodity price volatility.
The world's biggest miner said lower prices for its key resources, including a 17 per cent dive in iron ore, wiped $8.9 billion from underlying earnings of $28.4 billion.
'BHP Billiton delivered robust financial results in the 2013 financial year, a period characterised by slowing global growth and volatile commodity markets,' the miner said in a statement to the Australian stock exchange.
'Economic conditions over the second half of the 2013 financial year were affected by lower-than-expected growth in emerging economies,' it added. 'Weaker trade and soft manufacturing activity pulled growth rates slightly below expectations in China.'
New Chief Executive Officer (CEO) Andrew Mackenzie said that softer Chinese trade and
manufacturing data 'provide evidence of the transition underway in their economy' but BHP was 'confident of GDP (gross domestic product) growth in China of 7-8 per cent'.
'In the next 15 years we expect global demand for commodities to grow by up to 75 per cent,' he told reporters. BHP Billiton said that it expected increased supply across the commodities market to continue pushing down prices in the short term, but the balance should right itself 'in time'.
'The growth rates for steel demand in Asia are expected to moderate as the Chinese economy gradually rebalances. This rebalancing should support growth in demand for other industrial metals, energy and agricultural products,' it said.
'We expect the rebalancing of the Chinese economy to be significant in terms of the nature of domestic demand as well as the types of goods and services the economy will produce,' BHP Billiton added.
'We also see India and Southeast Asia as significant sources of economic growth in the long term.'
Following last year's 34.8 per cent slump in annual profit to $15.42 billion, BHP Billiton said that it
had approved no major growth projects in 2013
and was targeting a cut in capital expenditure to $16.2 billion in 2014.
The world's biggest miner said lower prices for its key resources, including a 17 per cent dive in iron ore, wiped $8.9 billion from underlying earnings of $28.4 billion.
'BHP Billiton delivered robust financial results in the 2013 financial year, a period characterised by slowing global growth and volatile commodity markets,' the miner said in a statement to the Australian stock exchange.
'Economic conditions over the second half of the 2013 financial year were affected by lower-than-expected growth in emerging economies,' it added. 'Weaker trade and soft manufacturing activity pulled growth rates slightly below expectations in China.'
New Chief Executive Officer (CEO) Andrew Mackenzie said that softer Chinese trade and
manufacturing data 'provide evidence of the transition underway in their economy' but BHP was 'confident of GDP (gross domestic product) growth in China of 7-8 per cent'.
'In the next 15 years we expect global demand for commodities to grow by up to 75 per cent,' he told reporters. BHP Billiton said that it expected increased supply across the commodities market to continue pushing down prices in the short term, but the balance should right itself 'in time'.
'The growth rates for steel demand in Asia are expected to moderate as the Chinese economy gradually rebalances. This rebalancing should support growth in demand for other industrial metals, energy and agricultural products,' it said.
'We expect the rebalancing of the Chinese economy to be significant in terms of the nature of domestic demand as well as the types of goods and services the economy will produce,' BHP Billiton added.
'We also see India and Southeast Asia as significant sources of economic growth in the long term.'
Following last year's 34.8 per cent slump in annual profit to $15.42 billion, BHP Billiton said that it
had approved no major growth projects in 2013
and was targeting a cut in capital expenditure to $16.2 billion in 2014.
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