BHP Billiton Ltd. (BHP), the world’s biggest mining company, said second-half profit climbed to a record, beating analyst estimates, after prices of copper, iron ore and coal reached all-time highs because of demand from China.
Net income rose to $13.1 billion for six months ended June 30 from $6.6 billion a year ago, spokeswoman Kelly Quirke said today by telephone from Melbourne. This compares with the $11.6 billion mean of six analyst estimates compiled by Bloomberg.
BHP joins Vale SA in reporting record profit as the economy in China, the world’s biggest consumer of metals, expanded 9.5 percent in the second quarter. Chief Executive Officer Marius Kloppers is diversifying earnings by adding U.S. shale gas assets, including a $12.1 billion bid for Petrohawk Energy Corp., his second foray into the industry this year.
“Iron ore, coal are still holding on to the highs that we’ve seen earlier in the year and so profitability for the mining companies has really been very strong,” Catherine Raw, who helps manage BlackRock Inc.’s $17 billion World Mining Fund, said before the results.
BHP was unchanged at A$38.21 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The company will pay a final dividend of 55 cents a share, a 22 percent increase on last year, and more than the 50 cent estimate from UBS AG and Deutsche Bank AG.
“We expect robust demand in the short-and-medium term, supported by commodities intensive emerging economic growth,” the company said in a statement. “A more positive demand dynamic remains a distinct possibility should policy be enacted to further stimulate growth in the developed world.”
Fourth-quarter iron ore output rose 14 percent, driving an 11th straight annual production record, the company reported last month. Prices of the steelmaking material are set to stay at “elevated” levels until at least 2015 because of short supply, forecaster Wood Mackenzie Ltd. said last month.
China will maintain annual growth of between 7 percent and 9 percent, underpinning demand for the commodities produced by BHP, Chairman Jac Nasser said Aug. 10. The cost of hauling iron ore, coal and other dry bulk commodities by sea jumped to a four-month high this week on strengthening Chinese demand.
Goldman Sachs Group Inc. was earlier this month recommending investors buy commodities because growth in emerging economies is enough to tighten supplies. The broker joined JPMorgan Chase & Co and Morgan Stanley in forecasting gains in commodity prices.