BHP Billiton net profit plunges 29.5% to $10.88 bn
Sydney: Anglo-Australian mining giant BHP Billiton today said net profit slumped 29.5 percent to USD 10.88 billion in the year to June, citing slowing global growth and commodity price volatility.
The world's biggest miner said lower prices for its key resources, including a 17 percent dive in iron ore, wiped USD 8.9 billion from underlying earnings of USD 28.4 billion.
"BHP Billiton delivered robust financial results in the 2013 financial year, a period characterised by slowing global growth and volatile commodity markets," the miner said in a statement to the Australian stock exchange.
"Economic conditions over the second half of the 2013 financial year were affected by lower-than-expected growth in emerging economies," it added.
"Weaker trade and soft manufacturing activity pulled growth rates slightly below expectations in China."
New CEO Andrew Mackenzie said softer Chinese trade and manufacturing data "provide evidence of the transition underway in their economy" but BHP was "confident of GDP growth in China of 7-8 percent".
"In the next 15 years we expect global demand for commodities to grow by up to 75 percent," he told reporters.
BHP said it expected increased supply across the commodities market to continue pushing down prices in the short term, but the balance should right itself "in time".
"The growth rates for steel demand in Asia are expected to moderate as the Chinese economy gradually rebalances. This rebalancing should support growth in demand for other industrial metals, energy and agricultural products," it said.
"We expect the rebalancing of the Chinese economy to be significant in terms of the nature of domestic demand as well as the types of goods and services the economy will produce," BHP added.
"We also see India and Southeast Asia as significant sources of economic growth in the long term."
Following last year's 34.8 percent slump in annual profit to USD 15.42 billion, BHP said it had approved no major growth projects in 2013 and was targeting a cut in capital expenditure to USD 16.2 billion in 2014.