BHP Billiton warns as profits slump

MINING giant BHP Billiton, seen as a barometer of global economic prospects, has given a dire prognosis for the industrial world with a warning that its latest slump in profit is a sign that worse is to come.

It said earnings before interest and tax fell 2.8% in the September quarter to $921m (£626m) compared with the same time last year. Lower commodity prices, particularly for petroleum, copper and nickel, cut profits by $275m.

The group, which was formed though the merger of Australian group BHP and Billiton in March, said capacity utilisation in its key markets had fallen to its lowest level in 20 years.

China was 'one notable area of strong demand growth' but would not be enough to offset weakness elsewhere, it said. 'Although production cuts are intensifying, these remain insufficient to stem rising inventories in the absence of an imminent strong recovery in demand, ' BHP said. 'For the immediate future the risks remain on the downside.'

A dividend of 0.065 cents was declared.