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BHP sees bigger China role
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Diversified resources group BHP Billiton has lifted first-quarter sales by 3 percent from a year earlier, despite what it said Thursday were weak markets for many of its commodities. It named China as a key growth area for investment and sales opportunities. The group's earnings before interest and tax slipped slightly, down 2.7 percent to $844 million on sales of $3.922 billion. Net profit rose 1.1 percent to $572 million, ahead of the consensus forecast of about $540 million. The result follows a 12 percent fall in profit to $1.93 billion for the full year that ended on June 30. BHP Billiton, which is listed in Australia and the U.K., was created in July 2001 from the $28 billion merger of Australian resources giant BHP and the London-listed South African miner Billiton. The company has been run since July 1 by former Billiton chief executive Brian Gilbertson, who took over from Paul Anderson as CEO and managing director. (Full story) Gilbertson said Thursday the global economy remains weak, with China among the few countries to show growth. Focus on ChinaOn Wednesday Gilbertson told a business meeting in Melbourne that China would "feature prominently" in the company's thinking both as a commodity purchaser and a potential site for investment. BHP Billiton is a shareholder in the North West Shelf venture, which in August won a $13.5 billion long-term contract to supply liquefied natural gas (LNG) to China. (Full story) The deal is the biggest Australian export contact to date. The gas will come from the North West Shelf off the coast of Western Australia. In his review released with the first-quarter results, Gilbertson said rising steel production in Northeast Asia and China continued to support the markets for iron ore and metallurgical coal. Tensions in the Middle East had also pushed up petroleum prices. But he said prices for many of the company's other products "remain at very low levels." "We anticipate that the current quarter will be just as difficult as the last," he said. BHP Billiton shares are trading 1.6 percent higher at A$9.54 in Australia near midday Thursday. The broader market, measured by the S&P/ASX200, is up about half a percent.
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