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TITLE  BHP First-Half Profit Drops 57% on Prices, Writedowns
WRITER   administrator DATE   2009-02-04 09:51:16
BHP First-Half Profit Drops 57% on Prices, Writedowns
By Rebecca Keenan and Jesse Riseborough, Feb. 4. 2009


BHP Billiton Ltd., the world¡¯s largest mining company, said first-half profit fell 57 percent after metal prices plunged, prompting the company to write down $2.7 billion for closing mines and plants.

Net income was $2.6 billion, or 47 cents a share, in the six months ended Dec. 31, from $6 billion, or $1.07 a year ago, Melbourne-based BHP said today in a statement.

The global recession has curbed demand for metals, ending the six year commodity boom that delivered record profits for mining companies. The global economy is worsening and weakness in commodity prices will persist, BHP said today.

¡°They are quite cautious, they have to be,¡± said Peter Chilton, who manages the equivalent of $356 billion at Constellation Capital Management Ltd. in Sydney, including BHP shares. ¡°It all smacks of quite a serious downturn. Earnings are going to be far more subdued ahead.¡±

The stock rose 1 percent to $30.08 at 10:05 a.m. Sydney time on the Australian stock exchange. It¡¯s dropped 22 percent in the last six months.

BHP has joined Xstrata Plc and Rio Tinto Group in closing mines, cutting output and slashing jobs because of the recession. Freeport-McMoRan Copper & Gold Inc., the world¡¯s largest publicly traded copper producer, last month posted a $13.9 billion fourth- quarter net loss after the plunge in metal prices and the company wrote down the value of some mines and assets.

¡°If the demand outlook continues to weaken, we will continue to take actions that are required,¡± Kloppers told journalists on a conference call. ¡°It is difficult to predict when this particular business cycle will turn up.¡±

BHP declared a first-half dividend of 41 cents, up 41 percent from a year ago. Profit, excluding one-times items, rose 2.2 percent to $6.1 billion.

The profit compares with the average estimate of $4.4 billion of six analysts surveyed by Bloomberg News. Earnings per share declined 56 percent to 47 cents.

Resource from www.bloomberg.com
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