Australia's miner BHP beats market expectations

BHP Billiton beat market expectations with a solid first-half profit on Wednesday but sounded notes of caution about the short-term outlook for commodities demand.

The global miner's net profit for the six months ended December 31 was 6.14 billion U.S. dollars, more than double the 2.62 billion U.S. dollars the miner posted a year earlier.

Net profit excluding exceptional items fell seven percent 5.7 billion U.S. dollars from 6.13 billion U.S. dollars in the prior year, ahead of average analyst forecasts of 5.1 billion U.S. dollars according to a poll of analysts by the company.

BHP said that while global economic conditions had improved over the past six months, it was cautious about the speed and strength of the recovery in the developed world.

"It appears that stimulus measures that supported the recovery have not fully addressed structural issues such as weak labour markets and excess production capacity in developed economies," the miner said.

Restocking had helped boost commodities demand but real demand for metals was "sporadic" overall and "restrained" in the developed world, BHP said.

Commodity markets would be largely dependent on Chinese and Indian demand, the company said, and monetary tightening in China could have an impact.

"We do not expect China to stop lending, however, reduced credit liquidity in key segments of the commodity market may have a flow-on impact on prices," BHP said.

Source:Xinhua