BHP Billiton posts worst profit in a decade

BHP Billiton posts worst profit in a decade

BHP Billiton (LON:BLT) are up 6 percent this morning after releasing final year results, despite disclosing their worst underlying profit in a decade.

Falling commodities prices and trouble in the Chinese markets have affected the company’s performance. Their underlying attributable profit fell to $6.42bn for the year to June from $13.26bn a year earlier, a drop of 86 percent.

The company has pledged not to cut its dividend to shareholders and has reduced their capital spending to $8.5 billion in 2016 to meet that goal.

BHP Billiton Chief Executive Officer, Andrew Mackenzie, confirmed that volatility in China had affected the company’s outlook:

“In the short term we expect ongoing economic reforms in China to contribute to periods of market volatility. And, while we remain confident in the long-term outlook for commodities demand as emerging economies continue to urbanise and industrialise, we have lowered our forecast of peak Chinese steel demand to between 935┬ámillion tonnes and 985 million tonnes in the mid 2020’s.

“However, improved productivity can further stretch the capacity of our existing operations to increase volumes at very low cost.”