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 million 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.”
