With little sign of recovery in the global economy, the
world’s largest diversified miner, BHP Billiton, remains
cautious in its outlook for key commodity markets in the next
quarter, said chief financial officer Chris Lynch, speaking at the
company’s third-quarter financial results presentation last
week.
“Although the global geopolitical tension related to the
conflict in Iraq appears to have subsided, major economies have not
been able to generate new jobs and investment in recent months,
which is fundamental to an improvement in commodity markets.
“In general, commodity prices are now at levels similar to
those at the start of the year, with little sign of strengthening
in the near future,” he said.
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The demand for iron-ore and alumina continued to benefit from the
strong Chinese economy during the last quarter. However, the
emergence of Severe Acute Respiratory Syndrome could disrupt
economic growth in the country in the short term, decreasing
product demand in the next period.
Despite these global conditions, Lynch remains confident that BHP
Billiton, with its diversified portfolio of assets, is well placed
to respomineral process flow sheet symbolnd to opportunities in the current environment and to
benefit once the global economic upturn gets under way.
BHP Billiton released a strong set of financial results for the
nine months ended March 31, 2003, last week.
This impressive financial performance continues to enable the
mining company to proceed with its portfolio of growth
projects.
“Progress on all projects continues to be on or ahead of
schedule and budget,&rotary coal breaker india china manaufacturesrdquo; said Lynch.
BHP Billiton currently has 14 major capital projects under
development, including the recently-approved Phase 1 development of
the Greater Angostura oil- and gasfield, off the north-east coast
of Trinidad, and the Atlantis full-field development in the Gulf of
Mexico.
“The first aluminium was cast from the new facilities at
Mozal, in Mozambique, on April 7, more than five months ahead of
schedule.<is sio2 content a problem for iron orebr />
“Cost trends to date indicate that the project will likely be
completed below budget,” said Lynch.
He added that final costs for the Chilean Escondida Phase IV
expansion project, on a 100% basis, were $944-million, well below
the budgeted cost of $1,045-billion.
Lynch also said that the group was on track to achieve
cost-reduction targets.
The company has set targets of $270-million of merger savings by
single cylinder hydraulic cone crusherthe end of 2002/3, as well as additional cost savings of
$500-million by the end of 2004/5.
Commenting on the financial results, Lynch reported an attributable
profit of $1,375-billion for the nine months ended March 31,
pressured by the strengthening of the South African rand and
Australian dollar.
The company reported an 11,5% increase in turnover, to
$12,623-billion, mainly due to higher sales volumes of iron-ore,
copper, diamonds, energy coal and aluminium, as well as higher
prices for petroleum products, nickel, copper, manganese and
chrome.
This was partly offset by lower sales volumes of petroleum products
and lower prices for export energy coal, diamonds and
iron-ore.
Earnings before interest, tax, depreciation and amortisation
increased by 9,1%, to $3,857-billion, from $3,536-billion in the
corresponding period.
The company also said that earnings before interest and tax
amounted to $2,347-billion, which reflected an 11,8% increase on
the corresponding period.
Lynch said the increase was due to generally higher commodity
prices, increased sales volumes, cost savings, lower exploration
expenses and increased profits from new and acquired
operations.
Net interest on borrowings and cash fell from $334-million to
$299-million, mainly driven by lower market interest rates and
lower average debt levels.
The group reported exchange losses of $106-million on net debt,
compared with gains of $220-million during the corresponding
period. This was mainly in relation to the translation of
rand-denominated debt of companies which account in US dollars as
their functional currency.
The rand appreciated by 22% during the current period, compared
with depreciation of 42% in the corresponding period last year.