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BHP Billiton plc Reports Profits Down 31% But Lifts Dividend By 3.6%

The shares of BHP Billiton (LSE: BLT) (NYSE: BBL.US) slipped 56p, or 3%, to 1,900p during early trade this morning after the miner published its 2013 annual figures.

The FTSE 100 member said its “robust” financial results reflected “record production and substantial productivity gains offset by lower commodity prices“.

The statement showed revenues dropping 9% to $66bn and underlying operating profits diving 22% to $21bn.

BHP admitted profits had dropped within each of its petroleum, potash, copper, iron ore and coal divisions, with the latter experiencing a 73% profit collapse as coal prices slid as much as 34%.

Earnings per share excluding exceptional items dived 31% to $2.22 per share.

However, the full-year dividend was lifted by 3.6% to $1.16 per share.

BHP also said its net debt had advanced by $5.5bn to $29bn following capital and exploration expenditure of $23bn. The miner added that capital expenditure during the twelve months to June 2014 would drop to $16bn.

Looking ahead, BHP said:

In the short term, increased supply is likely to exert downward pressure on prices, although a lower rate of investment growth across the industry should, in time, lead to more balanced supply and demand.

The miner also claimed:

Over the long term we maintain a positive outlook as the fundamentals of wealth creation, demographics and urbanisation continue to create demand for commodities across Asia and other markets.

Based on today’s figures, BHP’s shares are valued at about 13 times earnings and offer a dividend yield of 3.9%

Of course, whether that valuation, today’s results and the wider prospects of the mining sector all combine to make BHP a ‘buy’ remains something only you can decide.

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> Maynard does not own any share mentioned in this article.