Global resources group BHP Billiton on Wednesday announced that its attributable profit, excluding exceptional items, increased by 85,5% to $6,512-billion in the year to June 2005, from $3,510-billion previously.
The median of seven analysts surveyed by I-Net Bridge was for BHP Billiton to report record attributable profit, excluding exceptional items, of $6,47-billion.
Attributable profit forecasts ranged from $6,2-billion to $6,6-billion.
The group reported basic earnings per share for the 2005 year of 106,4 United States cents, up 88,7% from 56,4 US cents in 2004.
Analysts had expected basic earnings per share, excluding exceptional items, of 105,6 US cents.
Basic earnings per share forecasts ranged from 101 US cents to 108 US cents.
Turnover for the year rose by 27,5% to $31,804-billion from $24,943-billion.
The group declared a final dividend per share of 14.5 US cents, for a total dividend per share for 2005 of 28 US cents, up 7,7% from 26 US cents in 2004.
During 2005, BHP Billiton saw record earnings before interest, tax, depreciation and amortisation (Ebitda) and earnings per interest and tax (Ebit) as well as year-on-year Ebit for all of the group’s divisions.
The group consists of seven operation divisions: aluminium, base metals, carbon-steel materials, stainless-steel materials, energy coal, petroleum and diamonds.
Ebitda rose 52,5% to $11,4-billion and Ebit increased 70% to $9,3-billion, with both figures excluding exceptional items.
BHP Billiton achieved annual production records for a number of commodities during its 2005 financial year. Those commodities were iron ore, metallurgical coal, natural gas, aluminium, nickel, silver, lead, manganese ore and manganese alloy.
In addition, the group increased year-on-year production for energy coal and copper.
During the 2005 financial year, eight major growth projects were commissioned, with a further 10 major projects under development.
There is a current project pipeline of $11,9-billion of new growth-related investments.
Turning to the outlook, BHP Billiton said that global economic growth rates have slowed from the exceptionally high levels seen last year.
In the US, growth rates continue to be above the long-term trend, but BHP Billiton said it expects higher interest rates and higher energy prices to keep growth rates below 2004’s levels.
Elsewhere, leading indicators point to a slowing in Japan after a stronger-than-anticipated first half, while the growth environment in Europe generally remains challenging, the group said.
However, the emerging economies remain buoyant, offsetting slowing growth in the OECD nations, BHP Billiton said.
“We continue to expect the global economy to experience an above-trend growth rate this year, thereby providing a sound underpin for commodity demand,” the group said.
China will remain a large and sustainable consumer of raw materials and resources over the coming decades, and the Chinese government’s recently announced measures to tackle the excessive growth rates in certain sectors of its economy are to be welcomed, BHP Billiton said.
“Having said this, we also believe that developing economies, like all economies, will be subject to business cycles, which will impact economic activity from time to time,” the group added.
“Prices will inevitability ease from their highs as demand growth slows and new supply comes on stream, although we continue to expect prices to remain high by recent historical standards,” BHP Billiton said.
“We are seeing capacity utilisation rates at extremely high levels and the resources industry continues to suffer from a lack of latent capacity to act as swing production,” the group said.
“This lack of capacity is compounded by logistical and infrastructure bottlenecks in many regions and this, combined with the pressure on construction and operating costs, translates to a higher risk of supply-side shocks than would otherwise be the case,” the company said. — I-Net Bridge