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Bloomberg.com: Worldwide: "BHP Second-Half Profit Up 30% on Prices, Output (Update1)

By Rebecca Keenan
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BHP Second-Half Profit Up 30% on Prices, Output (Update1)

By Rebecca Keenan
Enlarge Image/Details

Aug. 18 (Bloomberg) -- BHP Billiton Ltd., the world's biggest mining company, booked a 30 percent gain in second-half profit after boosting production to benefit from rising prices driven by demand from China.

Net income was $9.4 billion for the six months ended June 30, from $7.25 billion a year ago, according to Bloomberg calculations from the Melbourne-based company's full-year results released today. That matched the mean estimate based on 11 analyst forecasts for full-year profit compiled by Bloomberg.

Chief Executive Officer Marius Kloppers, 45, who's pursuing a takeover of Rio Tinto Group in the world's biggest mining industry acquisition, has pledged to spend at least $90 billion to expand output. BHP, which set records for annual production of seven commodities, said the effects of current weakness in developed economies on demand should be minimal.

``The key drivers of this performance are volume growth and higher prices in base metals such as copper, petroleum and iron ore, as well as very strong manganese prices,'' said Investec Securities's London-based analysts Kieran Daly and Rebecca O'Dwyer in an Aug. 12 report.

BHP shares rose 62 cents, or 1.6 percent, to A$38.60 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The earnings were reported after the market closed. The stock has lost 4 percent this year compared to a 21 drop in the benchmark index.

The company had record underlying earnings before interest and tax in its petroleum, base metals, iron ore, manganese and energy coal units, BHP said in a statement to the exchange.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net
Last Updated: August 18, 2008 02:50 EDT