BHP first-half profit down 5.5%

Global mining giant BHP Billiton said Wednesday its first-half profits fell 5.5 percent to US$9.94 billion, largely due to lower commodity prices and some production constraints. The result in the six months to December 31 was nevertheless one of the largest in Australian corporate history, and compared to the record US$10.5 billion the company booked in the previous corresponding period. Despite the drop-off in profit, which was slightly worse than analyst expectations, revenue increased 9.7 percent to US$37.48 billion from US$34.17 billion. Concerns about Europe's economic problems resulted in a general deterioration in demand for commodities during the first half, resulting in lower prices for most of BHP's products, the company said in a statement. "Prices for many of BHP Billiton’s products declined during the latter part of the 2011 calendar year as concerns surrounding broader European liquidity culminated in a general deterioration in commodities demand," BHP said. "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 behaviour and sentiment. "However, we expect underlying demand growth rates to remain robust, so long as the macroeconomic policy setting of the developing world retains a growth bias."