BHP Billiton Posts Another Record Profit, Continues Projects Totaling More Than $100 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--BHP Billiton (NYSE:BHP) (Melbourne, Australia) announced in a conference call on Monday that it has achieved an attributable profit of $15.4 billion, its seventh consecutive record, for the fiscal year ending on June 30. The company attributes the earnings to high prices and growing demand from emerging economies, posting annual production records in sectors including petroleum, copper, iron ore and manganese ore. "Despite cost pressures ... we continue to capture a very substantial portion of price movement to the bottom line," CEO Marius Kloppers said.

Kloppers said the company has been increasing its capital expenditures. BHP currently has 28 projects in execution or in consideration, representing $24.8 billion. Other medium-term growth projects total $90 billion. The company has completed 11 major projects worth $7.97 billion during the period, 10 of which began operation. There are six ongoing projects totaling $6.27 billion, and the company has received approvals for eight new projects worth $5.8 billion.

Industrial Info is tracking 12 active BHP projects, the largest of which is the $3 billion Matadi Grassroot Aluminum Smelter in Matadi in the Democratic Republic of the Congo. The plant will produce 800,000 tons per year of aluminum bars and ingots.

According to Kloppers, BHP's return on capital was 58%. "That return-on-capital figure was achieved in an environment where we've been ramping up capital expenditure, and there is a considerable amount of capital that is not yet productive on the balance sheet," he said. "These results are spectacular. They are built on very, very solid operating performance."

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