MercoPress. South Atlantic News Agency

BHP Billiton: record profits and upbeat about commodities

BHP Billiton Ltd. which is the world's largest mining company has reported a record annual net profit for the year ended June 30 of 15.39 billion US dollars, up 14.7% from the 13.42 billion of the previous year.

The result was in line with analysts' forecasts and supported by increased production and higher prices for oil, copper, iron ore, coal and manganese. Underlying profit, or earnings before interest and tax, was 24.28 billion, up 21%. A leader in major commodities business also has interests in oil and gas, and is expected to participate in exploratory drilling next year offshore the Falkland Islands. BHP Billiton is reaping the rewards from the rapid urbanization of China and other Asian developing nations that has been driving up demand for commodities and their prices for the past seven years. "The continuing massive industrialization in China is providing solid support to the global economy" the company said in a statement. The company also posted cost increases of 4.3%, equivalent to 1.18 billion US dollars during the year. According to BHP Billiton about 575 million of that was due to higher fuel, energy and raw material costs, while exchange rate movements had a negative impact of 1.13 billion US dollars on underlying earnings. The company said strong global demand for resources continues to provide cost challenges for the whole industry. The report also indicates that BHP Billiton has 28 projects in execution or feasibility studies worth about 24.8 billion US dollars focused on high margin commodities that would create significant future value. BHP Billiton has some 39,000 employees working in more than 100 operations in 25 countries. The company describes itself as a premier global company with industry leader or near industry leader positions in major commodity businesses, including aluminum, energy coal and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver and titanium minerals plus substantial interests in oil, gas, liquefied natural gas and diamonds. BHP Billiton was created through the Dual Listed Companies (DLC) merger of BHP Limited (now BHP Billiton Limited) and Billiton Plc (now BHP Billiton Plc), which was concluded on 29 June 2001. The company's market capitalization was 140 billion US dollars in August 2007.