BHP H2 profit soars 62% but misses forecasts

MELBOURNE: BHP Billiton reported a record second-half profit driven largely by iron ore, but just missed market forecasts and sounded a warning over costs and longer-term demand.

The global miner also sought to appease investors with a big hike in its dividend.

BHP, the last of the major miners to report results, was confident on the outlook for commodity prices despite expecting weak growth in Europe and the United States.

“We expect robust demand in the short and medium term, supported by commodities intensive emerging economic growth,” the company said.

However, it joined its peers in warning costs were rapidly rising.

“In the current environment, tight labour and raw material markets are presenting a challenge for all operators, and BHP Billiton is not immune from that trend,” the company said.

BHP raised its dividend by 22%, which it said reflected its “confidence in the long-term outlook for our core commodity markets”, after completing a US$10bil share buyback earlier than planned.

Investors had been divided over whether to expect another buyback following BHP’s recent US$12.1bil bid for US shale gas producer Petrohawk Energy, its biggest successful deal since BHP took over Billiton Plc.

Soaring prices for iron ore, copper and oil boosted attributable profit before exceptional items to US$10.98bil for the six months to June from US$6.77bil a year ago. — Reuters