The world's biggest
miner posted a 58 per cent fall in first-half net profit to $US4.24 billion,
while the company's underlying earnings - which excludes one-off write-downs
and gains - dropped 43.4 per cent to $US5.68 billion.
The result came in
broadly in line with average analyst forecasts of a $US5.72 billion underlying
profit, according to a Bloomberg survey. BHP Billiton's revenue fell 14 per
cent compared to the same period a year earlier to $US32.2 billion, as
commodity prices generally softened.
The company says
its profit was squeezed not only by the fall in commodity prices, but also due
to the strength of currencies in major producing nations such as Australia and
Chile, which pushed up local costs.
However, the
company says it is moving to contain costs, and also announced or completed $US4.3
billion in asset sales in the half-year to December 31. BHP Billiton also says
it expects a "modest improvement in the global economy" over the next
12 months as stimulus stabilises China's growth and the US economy makes steady
progress.
However, this rise
in growth is likely to be offset by an increase in the supply of key
commodities as new or expanded mines come online, limiting upside in commodity
prices. BHP has been part of this increasing supply, with the company
undertaking 20 new projects, most of which are expected to enter production
before the end of the 2015 financial year.
Kloppers Steps Aside
 |
| BHP CEO Marius Kloppers. |
The mining giant's
new chief executive will be the company's current head of non-ferrous Andrew
Mackenzie, who joined BHP Billiton in 2008, after previous experience working
with BP and Rio Tinto.
Mr Kloppers has
been in the top role for around five-and-a-half years and with BHP Billiton for
almost 20, and will stay with the company until October 2013 to assist with the
transition. BHP Billiton chairman Jac Nasser says Mr Kloppers has made the
company safer and stronger.
"Marius was appointed chief executive just
prior to the global financial crisis. Despite an exceptionally difficult
economic environment during his tenure, Marius and his team have delivered for
shareholders, significantly outperforming our peers in terms of total
shareholder returns," he said in a statement.
"He drove new investments into next generation
opportunities including US onshore gas and liquids and created one of the most
valuable companies in the world."
No Surprises
Fat Prophets
commodities analyst David Lennox says that is because BHP's profit was in line
with analyst expectations. "Overall,
I think the market won't be in any way surprised by the results that they have
seen," he told ABC News Online.
However, Mr Lennox
says the timing of the leadership transition was probably somewhat earlier than
many expected. "It was, perhaps, a
little bit of a surprise," he said.
"We were aware that BHP had activated a
succession plan to look at eventually replacing Mr Kloppers as CEO, and we do
think that there may have been a little [more] time for that particular plan to
be executed."
Mr Lennox says
Marius Kloppers's departure was under very different circumstances to that of
former Rio Tinto boss Tom Albanese.
However, fund
manager Roger Montgomery says Marius Kloppers has also been successful at
destroying shareholder value in different ways.
"In 2006 the company earned $13.6
billion. In 2013 analysts estimate earnings will be $13.8 billion and,
despite the fact there has been no net growth in profits, investors have
contributed massive amounts of additional equity - from $32 billion in 2006 to
$64 billion in 2012 and debt has risen from $12.9 billion to $27.6
billion," he wrote in a note on the results.
"In
other words BHP is significantly less profitable than it was in 2006."
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