First half year profits of BHP Billiton took a record leap of a 71 % to reach a profit of $10.6 billion of which $10 billion will be returned to shareholders. Reuter’s analysts had predicted a profit of $10.3 billion for the same period and they were also surpassed.
The largest mining company in the world said that revenue for the six months ending December was $34.17 billion which was 39% higher than the $24.57 billion for the same period last year. By market capitalization BHP Billiton is the fifth largest public company in the world.
The iron ore earnings for the company have tripled while the base metals earnings have gone up by 45 % for BHP Billiton. With the company being almost free of debt it was expected that they announce a buyback such as that of Rio Tinto’s $5 billion return to shareholders last week and they did not disappoint.
Chief executive Marius Kloppers said that while they expected a slowdown in the growth rate of global commodity demand in calendar year 2011, the economic environment still underpins a robust near-term outlook for their products.
The unsuccessful acquisition and takeover attempts have left it with enough cash and while they may be keen to attempt another major acquisition in the near future, as of now the company is initiating a $10 billion buyback in both on and off market transactions. BHP Billiton has also increased its interim dividend by 10% to just above 46 cents fully franked.
BHP Billiton sports a market cap of $250 billion. This is followed by Vale's $180 billion and Rio Tinto's $150 billion sized property.