BHP Billiton has hit record earnings boosted by iron ore production. The mining giant with a highly diversified portfolio that includes iron ore, coal, copper, zinc, diamonds, oil and natural gas has posted a profit of US$9.9 billion for the first half of the 2012 financial year.
The record production of iron ore from its Western Australian mining operations and the higher prices of petroleum and other bulk commodity products have helped to push the profits higher. BHP Billiton is going to issue an interim dividend of $ 0.55 per share. This marks an increase of 20% with a payout ratio of 29.5%.
Benchmark prices for commodities like iron, copper, and coal have fallen in the last couple of months. The slowing demand from China and the debt crisis that is looming over Europe have also contributed to the reduction in profit. This is not good news for the biggest Australian company in existence which had reported a 5.5% annual drop in the initial half net profit.
Despite the fall in profits the analysts are happy with the figures that BHP Billiton has released as they have plenty of cash in hand for further acquisitions of buy backs. The Chief Executive Officer of BHP Billiton, Marius Kloppers is happy with the profits posted saying that the result was robust and a strong and predictable performance by the company.