BHP Billiton profit declines 30 per cent
Slowing economic growth in China saps demand for raw materials, dragging down prices
A man walks through the foyer of the BHP Billiton headquarters in Melbourne. The company has reported a 30 per cent decline in full-year profit. Photo: Bloomberg
BHP Billiton, the world’s biggest mining company, said full-year profit slumped 30 per cent after prices declined.
Net income dropped to $10.9 billion in the year to June 30 from $15.4 billion a year ago, the Melbourne-based company said today in a statement.
Profit, excluding one-time items, was $11.8 billion, compared with $17.2 billion a year ago.
BHP joins Rio Tinto and Vale in reporting a decline in profit as slowing economic growth in China saps demand for raw materials, dragging down prices.
BHP chief executive officer Andrew Mackenzie is targeting an 18 per cent drop in capital spending this fiscal year as investors including BlackRock pressure mining companies to defer expansions, new mines and acquisitions after the industry was hurt by more than $60 billion in writedowns.
“The equity market is looking for the miners to cut spending and increase returns,” Glyn Lawcock, a Sydney-based analyst for UBS, said in a report before the results. “It’s been a tough year for BHP.”
BHP fell 1.4 per cent to A$36.54 at the close of trading in Sydney