On August 12, Australian mining company BHP Billiton Ltd announced its financial results for the fiscal year ended June 30, 2009.
According to the company's unaudited financial statement prepared in accordance with International Financial Reporting Standards (IFRS), BHP Billiton posted a full fiscal year net profit of US$5.88 billion for the year ended June 30, 2009, down by 62 percent from US$15.39 billion last year, breaking a run of six consecutive record annual results for the miner as a slump in commodity prices took its toll. In the subject period, the company's net profit excluding exceptional items fell by 30.2 percent to US$10.72 billion from US$15.37 billion, while its revenue is down by 16 percent year on year to US$50.21 billion from US$59.47 billion.
However, the mining giant said, "BHP Billiton's 2009 financial year results demonstrate the success of our strategy in delivering a consistently strong performance throughout the cycle. Our portfolio of long-life, low-cost and diversified assets continued to yield strong margins and cash flows, despite the pressures of the current economic environment. Our low financial and operational leverage and a strong balance sheet enabled us to continue to invest in future growth."
While the company's underlying earnings before interest and tax (EBIT) decreased by 25 percent to US$18.2 billion from US$24.3 billion, BHP Billtion, which generates most of its earnings from iron ore, metallurgical coal and petroleum, said changes in prices hit underlying EBIT by US$3.99 billion, while volume changes hit EBIT by US$2.52 billion.
Meanwhile, BHP Billiton generated record net operating cash flows, up by six percent year on year to US$18,863 million. The outstanding cash flow result has allowed the company to reduce its net debt to US$5,586 million and continue to invest strongly in our capital and exploration programs (US$10,735 million), said BHP Billiton.
FY 2009 ($billion) | FY 2008 ($billion) | Change (%) | |
Revenue | 50.211 | 59.473 | -15.6 |
Underlying EBITDA | 22.275 | 28.031 | -20.5 |
Underlying EBIT | 18.214 | 24.282 | -25.0 |
Profit from operations | 12.160 | 24.125 | -49.6 |
Attributable profit (excluding exceptional items) | 10.722 | 15.368 | -30.2 |
Attributable profit | 5.877 | 15.390 | -61.8 |
Net operating cash flow | 18.863 | 17.817 | 5.9 |
Commenting on its full year financial results, BHP said, "The Group's financial strength has been a clear competitive advantage during the severe economic downturn. It leaves us well positioned to invest in growth and participate in opportunistic mergers and acquisitions. The Western Australia iron ore production joint venture with Rio Tinto is an example of our focused pursuit of capacity growth in Tier One assets."
"Nevertheless, we were not insulated from the swift and dramatic economic downturn and took decisive actions in response to changing market conditions. This included the decision not to proceed with the Rio Tinto takeover offers, production adjustments to match decreased demand, the suspension and sale of cash negative operations, and deferral of lower priority capital expenditures," the mining giant added.