The Miners
BHP, Rio profits may hit record
(China Daily)
Updated: 2010-01-28 08:12
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A Rio Tinto reclaimer shovels iron ore at Karatha Port in Australia. Bloomberg News |
MELBOURNE: BHP Billiton Ltd and Rio Tinto Group, the world's biggest and third-largest mining companies, are set to return to record profits faster than estimated because of a quicker rebound in the global economy.
Brokers have increased London-based Rio's 2010 earnings estimates and Melbourne-based BHP's fiscal 2011 predictions by more than $1 billion in the past four weeks, according to Bloomberg data. Rio's shares may gain 14 percent in the next 12 months and BHP's almost 10 percent, according to the data.
The World Bank has raised its forecast for global growth in 2010 as the economy in China, the world's biggest consumer of metals, expands at the fastest rate in three years. UBS AG and Citigroup Inc are among brokers who've boosted profit estimates for BHP and Rio after they reported record iron ore output.
BHP declined 2.3 percent and Rio fell 4.7 percent in Sydney trading yesterday. BHP spokeswoman Kelly Quirke and Rio spokesman Tony Shaffer declined to comment.
Rio may have net income of $9.3 billion in 2010, according to the median of 12 analyst estimates compiled by Bloomberg. That would beat its record in 2006 of $7.4 billion. BHP may report profit of $16 billion in fiscal 2011, according to 13 analyst estimates, beating 2008's record $15.4 billion. BHP reports earnings on Feb 10 and Rio on Feb 11.
Mining company profits plunged after the global financial crisis struck in 2008.
Now, Rio, BHP and South Korea's Posco, Asia's most profitable steelmaker, are raising production as demand from carmakers and builders rebounds.
Bloomberg News
(China Daily 01/28/2010 page17)
