FTSE 100-listed BHP Billiton’s shares dropped over three per cent in early trading yesterday, after the miner unveiled a 16 per cent decline in full-year earnings.
Underlying earnings fell to $28.4bn (£18.1bn) and revenue dropped by 8.7 per cent to $66bn for the year ended
30 June, hit by dwindling commodity prices and a slowdown in global demand.
Like other miners, BHP Billiton is looking to cut costs and divest non-core assets in order to offset challenging market conditions. Chief executive Andrew Mackenzie said yesterday that he plans to cut spending by 26 per cent to $16.2bn in the 2014 financial year.
However, the firm has made a long-term bet on growing agricultural demand and plans to invest $2.6bn in developing a Canadian potash project, delaying production until 2020 from its original 2015 target, while inviting offers for stakes in the mine. Mackenzie said that “emerging economic conditions” had stretched out the timeframe and that the firm was expanding into the potash market cautiously.
The firm increased its dividend by 3.6 per cent to $1.16, just falling short of analysts’ estimates of $1.17. Shares closed 1.7 per cent lower at 1,923.50p.