BHP Billiton records 15th straight year of iron ore production, set to report $US13.6 billion full year profit

BHP Billiton is expected to report a bumper full year profit after achieving a 15th straight year of record iron ore production.

(FILES) This file undated handout photo released by BHP Billiton on February 9, 2012 shows iron ore being trucked out of the open cut mine at Mount Newman in Western Australia. Global miner BHP Billiton on August 22, 2012 unveiled a 34.8 percent dive in annual profit to USD15.42 billion and delayed a key project, citing weakness in commodity prices and cost pressures. --- EDITORS NOTE --- RESTRICTED TO EDITORIAL USE MANDATORY CREDIT "AFP PHOTO / BHP BILLITON" NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS AFP PHOTO / FILES / BHP Billiton

THE world’s biggest miner BHP Billiton is expected to report a bumper full year profit next week after achieving a 15th straight year of record iron ore production.

Analysts believe the global miner could deliver a net profit of more than $US13.6 billion, up from $US10.9 billion in the prior year.

It would be a welcome turnaround for the diversified resources company whose profit dropped by 30 per cent to $US10.9 billion in 2012/13 due mainly to weaker commodity prices.

Deutsche Bank analysts have forecast BHP will report underlying earnings of $US13.63 billion and earnings before interest and tax of $US23 billion.

They also expect the company to issue a final dividend of US61 cents and announce an on-market rolling share buyback of at least $US3 billion.

But it won’t all be good news for shareholders.

In its production report last month BHP said it expects to take an earnings hit of between $US900 million and $US1.3 billion due to mine site rehabilitation costs and redundancy payments.

Deutsche Bank believes capital management could dominate the annual result.

Capital Expenditure guidance for fiscal 2015 could be as low as $US13 billion.

Investors will also keep an eye on the company’s cost cutting program which has already achieved $US3.3 billion in savings excluding cuts to exploration costs.

They will also be looking for any portfolio restructuring such as the widely flagged sale of the company’s Nickel West mining assets in Western Australia amid stronger nickel prices.

Iron ore will once again deliver the bulk of the company’s earnings, followed by petroleum and copper.

BHP recently said it’s on track to achieve its target of 16 per cent production growth across all commodities for the two years to the end of June 2015.

And the company revealed it received an average realised price of $US96 per tonne for its iron ore during the second half of the financial year, down from $US112 a tonne in the preceding six months.

BHP Billiton will deliver its annual financial results on Tuesday August 19.

Originally published as BHP Billiton records 15th straight year of iron ore production, set to report $US13.6 billion full year profit