BHP Billiton H1 Profit Up 83%, Backs 2014 Production Outlook

(RTTNews) - Anglo-Australian mining giant BHP Billiton (BHP, BHP.AX, BBL, BLT.L) on Monday reported an 83 percent increase in profit for the first half of fiscal 2014, aided by its cost-cutting measures that helped offset the impact of lower commodity prices. The company also increased its interim dividend by 3.5 percent.

"The commitment we made 18 months ago to deliver more from existing infrastructure at a lower unit cost is delivering tangible results with annualised productivity led volume and cost efficiencies totalling $4.9 billion now embedded," BHP Billiton said in a statement.

Looking ahead, BHP Billiton said it expects the global economy to strengthen over the balance of the 2014 financial year and provide continued support for commodities demand, but at more moderate rates of growth.

BHP Billiton said its profit for the half-year to December 31, 2013 was $8.11 billion, up from $4.43 billion in the year-ago period. Earnings per American Depository Share or ADS were 303.8 cents, higher than 166.0 cents in the prior-year period.

Excluding certain exceptional items, underlying profit for the period was $7.76 billion, compared to $5.94 billion in the year-ago period.

The company's underlying earnings before interest, tax, depreciation and amortization or EBITDA rose 16 percent from the year-ago period to $16.52 billion.

Revenue for the half-year period grew 6 percent to $33.95 billion from $32.07 billion in the previous-year period.

The higher revenues reflect a 31 percent surge in iron-ore revenues as well as a 6 percent increase in revenues at the petroleum and potash segment. These were partly offset by a 3 percent decrease in copper revenues, 4 percent decline in coal revenues and a 7 percent drop in revenues from aluminium, manganese and nickel.

Profit at the company's iron ore operations grew 35 percent from the year-ago period to $6.50 billion, while petroleum segment's profit declined 16 percent and copper segment profit decreased 6 percent.

BHP Billiton noted that annualised productivity-led volume and cost efficiencies are now expected to increase to $5.5 billion by the end of the 2014 financial year.

Further, BHP Billiton's board announced a fully-franked interim dividend of 59 cents per share, up 3.5 percent from last year's 57 cents. The company said it will consider the trajectory of its progressive base dividend at the end of the 2014 financial year.

Looking ahead to fiscal 2014, BHP Billiton maintained its production guidance for iron ore at 192 million tonnes, petroleum at 250 million barrels of oil equivalent or MMboe, metallurgical coal at 41 million tonnes, energy coal at 73 million tonnes and copper production at 1.7 million tonnes.

BHP Billiton said that with strong free cash flow projected, it expects net debt of $27.1 billion to decline to $25 billion by the end of the 2014 financial year. The company also expects overall production growth of 16 percent over the two years to the end of the 2015 financial year.

BHP closed Friday's regular trading on the NYSE at $68.32, up $0.71 or 1.05 percent on a volume of 1.43 million shares.

In Tuesday's regular session on the Australian Securities Exchange, BHP.AX is currently trading at A$38.71, up A$0.69 or 1.80 percent on a volume of 7.3 million shares.