iron ore lifts bhp billiton profit, page-12

re: who the hell knows? these guys? Moody's affirms BHP's A1 rating
From: AAP
August 25, 2005

MOODY'S Investors Service today affirmed the A1 unsecured long-term rating and P1 short-term rating of BHP Billiton Ltd following the company's record annual results yesterday.

Moody's said BHP Billiton's (bhp.ASX:Quote,News) key credit metrics including Retained Cash Flow/Debt, interest coverage and EBITDA (earnings before interest, tax, depreciation and amortisation) margin, were higher than expected, but within the ranges appropriate for BHP Billiton's ratings.
"BHP Billiton continues to benefit from a favourable operating environment for all its products, reporting a very strong EBIT (earnigns before interest and tax) of $US9.3 billion and operating cash flow of $US8.7 billion," Moodys said.

Crude oil, iron ore, coking coal and base metals continue to drive most of group earnings, contributing around 73 per cent of consolidated EBIT in 2004/05.

Commodity price increases across-the-board and volume increases mainly in iron ore and copper more than offset increases in operating costs which were mainly due to the effects of higher costs.

These trends are consistent with industry experience globally.


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The outlook on BHP Billiton's A1 rating is stable, reflecting Moody's expectation of continued solid performance of its key commodities over the next 12-18 months.
The stable outlook incorporates Moody's assumption of moderation in commodity prices for 2005/06, reflecting a potential tempering in economic growth in China, which continues to be a key driver for the metals and mining and oil and gas industries.

BHP Billiton reported that the integration of WMC Resources has progressed well, which was in line with Moody's expectation.


Furthermore, the group commissioned eight major growth projects during the year in line with budget and schedule, and most projects under development are on track. The exception is the substantial

Ravensthorpe and Yabulu nickel projects, whose original cost budget of $US1.4 billion is currently under review.

The schedule for these projects remains on track. Moody's is monitoring performance of these projects, but does not anticipate an impact on BHP Billiton's ratings.

BHP Billiton's decision to close down the HBI plant in Western Australia has no ratings impact.

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