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BHP Billiton beats expectations

February 24, 2015

Tumbling commodity prices have nearly halved earnings by the world's biggest miner, BHP Billiton. But the drop was milder than expected and the company's share price rose by 2 percent.

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A nickel mine in Ravensthorpe
Image: picture-alliance/dpa

Shares in BHP Billiton, the world's biggest miner, were up 2 percent on Tuesday as the company reported better-than-expected first-half earnings on the back of tumbling commodity prices.

The Australian mining giant said it had prepared for such a drop in commodity prices by cutting project spending to its lowest level in five years and reining in investments. That foresight helped temper a 47.4 percent dip in net profits, which fell to $4.2 billion (3.7 billion euros) from $8.1 billion during the same period of time last year.

"We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment," said BHP's chief executive, Andrew Mackenzie.

BHP's bottom line has taken a heavy hit from falling prices of its most profitable commodities, iron ore and oil, but it was able to offset some of those losses by reducing capital and exploration expenditures by 23 percent.

Underlying earnings, excluding one-off items, were down 31 percent to $5.3 billion, beating analysts' expectations and lifting the miner's share price by 2 percent.

cjc/ng (AFP, Reuters)