BHP Billiton profits drop with weaker iron ore price

Published:  8 Feb at 6 PM

As reported by the BBC, lower commodity prices are pushing down profits for BHP Billiton, the world's largest mining company. The Anglo-Australian firm reported a 5.5% yearly fall in first-half revenues to $9.9 billion (£6.2 billion).

The company also forewarned of a turbulent future citing Europe's debt crisis and a slowing Chinese demand. The prices of standard commodities such as iron ore, coal and copper have steadily dropped over the past few months.

In the same period, BHP recorded revenues of $10.5 billion in 2010, a record figure in Australian business history. BHP Billiton shares dropped by 1.1% during early trading in Sydney.

The start of the year saw shares rising by 11%, surpassing the wider Australian market. The figures come following rival miner Xstrata’s announcements to join forces with Glencore, the globe’s biggest commodity trader, on a $90 billion deal.

Despite the drop in revenues during the most recent period, profits went up by 9.7% to $37.5 billion. In an official statement, the company said the volatile commodity market would likely continue as the euro debt crisis and the generally weak construction and manufacturing sectors would surely affect customer sentiment and behaviour.

The firm added it would honour its timetable of spending $80 billion on expanding its activities by 2015. One sector in which BHP Billiton is planning to increase its activities is the gas and oil markets.