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Currency pressure hits BHP result
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Australia's BHP Billiton, the world's largest diversified resources group, has posted a 19 percent fall in first-half net profit, reflecting what it called exchange rate pressures. BHP Billiton, which is dual-listed in London and Australia, said its net attributable profit for the six months to December 2002 was $931 million, on revenue of just over $8 billion. Profit before interest, tax, depreciation and amortization was $2.451 billion, up 2.3 percent from the corresponding period in 2001. The result was better than market expectations. Analysts had also expected writedowns in some of its businesses, but there were no changes. Investors welcomed the result, pushing BHP Billiton shares about 2.5 percent higher in Australian trading by midday Monday. BHP Billiton said the first-half figures represented a "strong performance" in challenging market conditions. New CEO Chip Goodyear, who took over after the shock resignation last month of Brian Gilbertson, told CNN the company had performed "quite well" and was exercising tight cost control. Board differences
Gilbertson, who had been in the top job just six months, quit suddenly on January 6, citing irreconcilable differences with the board. (Full story) Gilbertson was executive chairman of Billiton at the time of its $28 billion merger with BHP in July 2001, and took over from Paul Anderson in July last year. Goodyear told CNN on Monday that on the question of writedowns, the company had looked at its assets and saw no need for a charge in any of its businesses. At a briefing later, Goodyear said China was proving to be a strong market for iron ore, alumina and other raw materials. In a statement to the Australian Stock Exchange, BHP Billiton said revenue was up 5.2 percent, but the decline in net profit reflected adverse movements in exchange rates. It reported merger benefits of $220 million in fiscal 2002 and a further $65 million in the December first half. It said that in addition to these benefits, it had achieved further cost savings of $70 million since the merger, against a target of $500 million by June 2005. Shares in BHP Billiton are 2.42 percent higher at A$9.31 by midday Monday, compared with a 1 percent gain for the broader Australian market.
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