LONDON, 25 August 2005 — Anglo-Australian miner BHP Billiton yesterday posted annual net profits of $6.5 billion, the highest result in Australian corporate history, attributable to soaring Asian demand for raw materials.
The result comes on the back of the aggressive price increases secured for the company’s iron ore, notably from Chinese steelmakers, coupled with higher global prices for commodities in general and record production levels.
The world’s largest diversified resource group reported that net profit, excluding exceptional items, was up 85.5 percent to $6.5 billion (5.3 billion euros) for the year ended June. The dual-listed group exceeded market consensus forecasts of $6.3 billion. “The consistent execution of the BHP Billiton business strategy has positioned the group to take advantage of the current strong market conditions and deliver another record result,” the company said in a statement.
However, in early afternoon London trade, BHP Billiton sank 2.75 percent to 812 pence as the group’s full-year numbers gave investors an excuse to take profits after recent gains. The capital’s FTSE 100 index of leading shares meanwhile dipped 0.38 percent to 5,280.0 points.
Broker Merrill Lynch argued that although the results were above expectations, core earnings before interest and taxes (EBIT) fell below forecasts, while the outlook for Europe remained challenging.
Overall group EBIT stood at $9.33 billion, around 2.3 percent below forecasts, Merrill Lynch said.
In April, BHP Billiton won a 71.5 percent rise in iron ore prices from a number of its steel customers as China’s demand for steel-making materials intensified.
Meanwhile, record production levels were reached in 11 commodities including iron ore, metallurgical coal, natural gas, aluminum and nickel. Production of energy coal and copper also increased during the year.
