BHP Billiton profits slump by almost a third

Klipspruit South Africa Image copyright BHP BILLITON

Profits at mining giant BHP Billiton have been hit by the falling price of iron ore, coal, copper and other commodities.

Underlying profit for the half-year to 31 December fell by 31% to $5.35bn (£3.46bn), but that was better than industry analysts were expecting.

To compensate for falling prices BHP has made deep cuts in its spending on exploration and other investment.

It spent $6.4bn during the six-month period, down 23% on the previous year.

"We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment," chief executive Andrew Mackenzie said in a statement accompanying the latest results.

"Since then, we have achieved annualised productivity gains approaching $10bn and reduced capital spending by almost 40%," he said.


BHP is planning to move its aluminium, manganese into a separate company, which will also hold nickel and silver mines and some coal mines in Australia and South Africa.

Called South32, BHP hopes to spin-off the new company in the summer following a shareholder vote.

The company has also been hit by falling oil prices.

Last month BHP Billiton announced a 40% reduction in its US shale oil operation.

By the end of June it plans to have reduced the number of shale rigs from 26 to 16.

The firm's Sydney-listed shares were trading higher in early trade on Monday.

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