BHP Billiton First-Half Profit Drops 5.5%

BHP Billiton Ltd., the world’s biggest mining company, reported a 5.5 percent drop in first- half profit, the first decline since 2009, as rising costs and lower output and prices halved base metals earnings.

Net income was $9.9bn in the six months ended Dec. 31, from $10.5bn, a year earlier, the Melbourne-based company said today in a statement. That compares with the $10 bn average estimate of seven analysts surveyed by Bloomberg.

Metal prices in London declined 20 percent in the half on reduced demand in Europe and slowing industrial production in China, the world’s largest metals buyer. BHP, which is spending $80bn over the next five years to boost output of iron ore, copper and coal, remains “cautious” on the market outlook, Chief Executive Officer Marius Kloppers told a conference call.

Persisting Volatility

BHP has 16 “buy” and four “hold” recommendations. The company may post full-year net income of $20.6bn in fiscal 2012.

“We expect volatility in commodity markets to persist as the European sovereign debt crisis and general weakness in the manufacturing and construction sectors across key markets are expected to weigh on customer behavior and sentiment,” BHP said in the statement.