iron ore lifts bhp billiton profit

Demand for Iron Ore Lifts BHP Billiton Profit to Record???



By WAYNE ARNOLD
Published: August 25, 2005


BHP Billiton, the world's largest mining company, said yesterday that the boom in prices for iron ore and other commodities pushed its annual profits to a record and that demand from China and other developing countries was still growing faster than the industry could dig new mines.

Skip to next paragraph

Forum: Markets and Industries
The company's net profits in the year that ended June 30 rose 89 percent, to $6.4 billion, as sales climbed 27.5 percent to $31.8 billion. Rising prices for iron ore, copper and other commodities contributed $5.7 billion to the company's pretax earnings.

The results appeared to defy predictions in recent months that rising global interest rates, increased production of raw materials and efforts by China to rein in industrial overexpansion would end the upswing in commodities prices. Contrary to that thinking, BHP Billiton repeated a theory popular among resource analysts and executives that the industry had entered a "supercycle" in which fundamental changes to the global economy keep prices rising for a decade or longer, a period that may have begun last year.

Charles W. Goodyear, the chief of BHP Billiton, told analysts that the rapid growth of China and India appeared to be creating a sustained surge in commodities demand.

Despite the company's ebullient outlook, shares of BHP Billiton fell at least 2.4 percent after the results. Analysts said investors were taking profits after having sent the stock up almost 30 percent in the last three months in anticipation of the result.

China accounted for 12.6 percent of BHP Billiton's total revenue in its most recent fiscal year, up from 9.8 percent the year before. BHP Billiton's latest profit figure was the largest ever reported by an Australian company, and rounds out a stellar earnings season.

******

The 70%+ increase in Iron Ore prices only came into effect a couple of months ago?????????

12 months+ with the Iron Ore price increase should provide better results for BHP????

Good trading is coming up in BHP.

The bigger the Fall the better the buying opportunity.

Cheers.