THE only admission of error in 2 hours of BHP Billiton's results presentation on Wednesday came when chief financial officer Graham Kerr conceded: "In hindsight, we would've liked to identify the change in the alumina market earlier on."
BHP's aluminium and nickel division recorded a widening loss of $US285 million in earnings before interest and tax in the half - down from a $US66 million loss a year earlier - the worst performance of any division.
Impairments of $US1.5 billion against the Worsley alumina refinery and $US865 million against BHP's Nickel West assets, both in Western Australia, contributed to the 58 per cent fall in profit for the first half to $US4.2 billion.
BHP declared a US57¢-a-share dividend (up 4 per cent) and its shares fell 0.9 per cent, or 35¢, in local trade to $38.65.
Mr Kerr, briefing investors from London, was followed by outgoing chief executive Marius Kloppers who said BHP would not be pressured into selling off assets fast, saying "assets sold in haste ... you repent at your leisure".
In the December half, BHP completed assets sales (or announced sales that it will complete this half) totalling $US4.3 billion, including the $US1.9 billion sale to Rio Tinto of its 37 per cent stake in Richards Bay Minerals in South Africa, the $US1.6 billion sale to Shell of its 10 per cent interest in the Woodside-led Browse gas project in WA, and the $US420 million sale to Cameco of the Yeelirrie uranium deposit, also in the state. The prices achieved were at a premium to market valuations, Mr Kloppers said.
The impact of lower commodity prices saw BHP's revenues fall 14 per cent to $US32 billion during the half, down from $US37.5 billion a year earlier, while underlying earnings before interest and tax (EBIT) fell 38 per cent to $US9.8 billion. This was slightly above the consensus estimates of $US9.5 billion.
BHP said lower commodity prices - particularly a 28 per cent reduction in realised iron ore prices - were responsible for $US5.4 billion or most of the fall in underlying EBIT.
The powerhouse WA iron ore division generated $US4.6 billion or 49 per cent of BHP's EBIT, down 39 per cent on the previous corresponding half despite record sales volumes from the Pilbara operations.
BHP said its earnings were reduced by $US164 million spent on expanding capacity, which would help it increase production.
But the company wrote off $US618 million spent on the proposed $20 billion expansion of the outer harbour at Port Hedland. Mr Kloppers said BHP looked forward to approving one of its most capital cost-effective expansions of the inner harbour instead.
Petroleum contributed another $US3.2 billion or 33 per cent of EBIT, down by $US939 million due partly to a 4 per cent drop in realised oil prices to $US105 a barrel, and a 6 per cent drop in gas prices.
EBIT from copper rose by $US326 million, or 19 per cent year on year, to $2 billion, while the metallurgical coal business lost $US101 million in the half, hit by a 37-39 per cent drop in hard and soft coking coal prices.
Thermal coal fell by more than two-thirds to $US246 million.