BHP Billiton promises new cost cuts as profit falls by half

Shares in BHP Billiton jumped more than 6 per cent on Tuesday after the Anglo-Australian miner pledged to protect its progressive dividend policy despite annual profit more than halving.

The full-year results from the world’s largest miner by market capitalisation fell short of analysts’ consensus expectations, reflecting hefty falls in the prices of iron ore, coal, copper and oil. However, the miner said it would accelerate cuts in costs and capital expenditure.

Andrew Mackenzie, BHP chief executive, said the company could continue to grow in spite of the deep spending reductions.

BHP said underlying profit fell to $6.4 billion for the 12 months to June 30th, below analysts’ consensus forecasts of $7.7b billion and less than half the $13.3 billion for the previous financial year.