BHP Billiton, the world's largest mining company, said first-half profit surged 72 per cent, driven by an almost threefold gain in iron ore earnings and spurring a doubling of its share buyback to $10 billion.
Net income was $10.5 billion, or 188.6 cents a share, in the six months ended December 31st from $6.1 billion, or 109.8 cents a share, a year earlier, Melbourne-based BHP said today in a statement.
Chief executive Marius Kloppers joins Rio Tinto Group and Xstrata Plc in boosting shareholder returns as China's demand boosts metal prices.
BHP, which plans to spend more than $80 billion by 2015 on mines and oilfields, said today global economic fundamentals are improving with further positive signs in developed countries such as the US.
BHP announced its earnings before the market opened. It closed up 0.2 per cent yesterday at $47.36 in Sydney.
GDP and capital spending growth this year in China is expected to remain strong in absolute terms, despite growth rates slowing from 2010 levels, BHP said.
"Longer term, we remain confident in the outlook for our core commodities based on emerging markets being the principal drivers of growth," Kloppers, 48, said in the statement today. "We expect markets to be volatile and event driven, however the continuing urbanization and industrialization of emerging economies, which is still in its early stages, should provide strong structural support over the long term."
BHP will pay a first-half dividend of 46 cents, up from 42 cents a year earlier.
The company expanded its existing share buyback program to $10 billion, from $4.2 billion in November. BHP revived the buyback plan in November after it scrapped a $40 billion hostile bid for Potash Corp. of Saskatchewan. BHP recorded a $314 million one-time charge for its failed bid for Potash the company said. The deal was rejected by Canada because it didn't meet a requirement to bring the country "net benefits."
BHP Chairman Jac Nasser is encouraging Kloppers to persist with considering acquisitions, he said.
The company has a net cash position of $200 million and has $16.1 billion of cash on hand.
Bloomberg