Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
BHP announces record profit -

View in ParlViewView other Segments

BHP announces record profit

Broadcast: 23/08/2006

Reporter: Helen Brown

Mining giant BHP Billiton has today delivered what the market expected - the biggest ever profit in
Australia's corporate history.


TONY JONES: Mining giant BHP Billiton has today delivered what has been expected of it - the
biggest-ever profit in Australia's corporate history. It raked in more than US$10 billion last
financial year, that's more than A$13 billion. The results are driven by a demand for raw materials
that's pushing up prices to record levels in a commodity boom that isn't expected to end anytime

HELEN BROWN: BHP Billiton continues to set the pace for Australian corporate records. It's added
more than $5 billion to last year's figure, a result seen as an endorsement of the company's plan
to spread its interests.

CHIP GOODYEAR, CEO BHP ILLITON: These results continue to reflect the consistent and successful
execution of our company's strategy.

ANDREW HARRINGTON, ANZ BANK: They've had the benefit of very high prices for basically all of their
commodities all at the same time. At one time BHP was touting the benefits of diversification
through a broad range of commodities products but they're enjoying a good run in oil, and in base
metals, and in thermal coal, metallurgical coal, iron ore - are all experiencing very high levels
of prices.

HELEN BROWN: BHP is mining the raw materials that developing nations are willing to pay for. The
strong price rises recorded just this year for nickel and copper give some idea as to why the
company is making a profit of A$13.7 billion. The appetite in China to construct buildings and
create consumer goods is expected to continue at a strong level, even if it eases a little. And
India is now growing faster than China, although off a lower base.

CHIP GOODYEAR: We are clearly at a very interesting time in our industry. We see the global economy
as being good, developing economies are strong. The world has rediscovered resources and how
critical they are to our daily lives, and when you take a look at the developing countries, they
are absolutely fundamental to economic development for, as I say, billions of people around the

HELEN BROWN: And as amazing as it might seem, indications are that the growth is expected to
continue. Andrew Harrington says BHP's credibility has grown for its ability to accurately pick
world economic conditions and deliver on its upbeat forecasts. And it's putting the infrastructure
in place to make sure it can keep delivering.

ANDREW HARRINGTON: They're probably going to be able to continue producing at this level. They're
investing about $5 billion in the past year on new projects or continuing projects, so that should
hold them in good stead.

HELEN BROWN: While the appetite in developing countries is underpinning much of the company's
dramatic growth, BHP Billiton says its customers in developed nations such as Japan are also
proving resilient. And that no doubt means more good news for investors. BHP Billiton has delivered
nine consecutive dividend increases, and this year's dividend is up by almost 30%. Ironically, just
as BHP is making billions, workers at a BHP controlled Chile copper mine have been on strike for
more than two weeks, asking for more of a cut of the commodity price windfall. The Escondida mine
is one of the world's biggest, responsible for about 8% of production. But even something like this
may not slow BHP down.

ANDREW HARRINGTON: It has quite a fast portfolio, however it can help ride out these kinds of
issues. And it has extremely high profitability, which may allow it to afford to pay more.

HELEN BROWN: Next year's results are sure to generate just as much interest. Helen Brown, Lateline.