BHP Billiton profits hit by falling commodities demand

BHP Billiton, the world's largest miner, said a deterioration in demand for commodities contributed to a 5.5% slide in half-year profits to $9.94bn (£6.25bn).

This was below analysts' forecasts of net profits of around $10bn for the second half of 2011. Revenues for the group rose 9.7% to $37.5bn.

The Anglo-Australian company said the first six months of its financial year had their "challenges in terms of global economic growth reflecting continued difficulties in Europe and slowing levels of activity in the high growth economies of China and India", the Telegraph reports.

BHP said prices for many of its products declined during the latter part of 2011 "as concerns surrounding broader European liquidity culminated in a general deterioration in commodities demand".

Despite record production of iron ore and natural gas over the period, BHP's total volumes were down year-on-year.

It said the "two bright spots were the United States, which saw stronger growth on the back of robust performance in the manufacturing sector, and Japan, which saw a rebound in activity following the impacts of the March 2011 tsunami".

BHP forecast "modest growth" in the coming quarters from both these areas, although China "after an extended period of policy tightening" was seeing an "expected slowdown in fixed asset investment and industrial production".

BHP raised its interim dividend by 20% to 55 cents, in spite of its relatively downbeat results.