BHP Billiton Half Year Results Positive

Multi commodity miner BHP Billiton reported underlying EBIT (Earnings Before Interest and Taxes) of $79 million for the diamonds and titanium minerals segment in the half year ended December 31, 2008. Revenues for the segment rose 9.3 percent to $457 million.

The miner did not report revenues from its diamond operations separately from titanium minerals. BHP said the earnings from the Diamonds and Specialty Products segment were positively impacted by a stronger U.S. dollar and reduced exploration and business development costs.

Operational profit from the Diamonds and Specialty Products segment is $9 million, falling sharply from $72 million in the six months ending December 31, 2007.

BHP said it witnessed an unprecedented fall in commodity prices during the six months to December 2008, with market prices falling in the order of 50 percent during this period. The company however benefited from strong volume additions in petroleum and iron ore.

Group revenues totaled $29.78 billion in the six month period, rising 16.6 percent year-over-year. EBIT totaled $11.9 billion while profit from operations, including $4.68 billion in pre-tax exceptional items, stood at $9.49 billion.

The exceptional items included $450 million associated with the Rio Tinto takeover bid and a $70 million impairment of assets in the Diamonds and Specialty Products segment.

In its short term outlook, the company expects that many producers will focus on cash conservation to cope with financial distress and therefore commodity price weakness and volatility will persist.

However in the long term, BHP expects continued strong growth in demand for commodities from China and other emerging economies and long-run commodity prices “to be driven by their long-run marginal cost of supply.”