Lower commodity prices have cut profits for BHP Billiton Ltd for the second straight year to $US10.87 billion, as the miner announced it would invest $US2.6 billion in its controversial Jansen potash project.
Investors were disappointed with the news, sending the stock 1.59% lower to $35.96 at 1015 AEST, against a slight benchmark rise of 0.02%.
The miner said increased supply was likely to put downward pressure on commodity prices in the short term.
Falling iron ore and coal prices pushed underlying profit 31.3% lower to $US11.79 billion in the year to June - well short of analyst expectations - from the $US17.11 billion made last year.
Analysts consensus had pegged underlying net profit at $US12.5 billion.
BHP said weaker commodity prices shaved $US8.9 billion from underlying EBIT - including a $US4.1 billion hit taken on a 17% reduction in the average realised price of iron ore.
The commodity price woes offset record iron ore production and sweeping cost cuts of $US2.7 billion in the year.
Net profit after tax was 29.5% lower, at $US10.87 billion, with the company taking a $US922 million hit on one-off items, including an impairment of its Nickel West and Worsley assets in Australia and on some wells in the Permian basin in Texas, where the miner is drilling for oil and gas.
Other factors weighing on profit included a temporary increase in the group's effective tax rate to 39.3% and charges of $US280 million on debt securities.
In the year ending June 30, BHP’s revenues fell 8.7% to $US65.96 billion.
A broader focus on cost cutting and maximising shareholder returns has seen the miner increase its final dividend to 59 US cents per share, just short of analyst expectations, compared to last year's 57 US cents per share.
The payout pushes BHP's total dividend to $US1.16 per share, compared to $US1.12 per share last year.
The group's annual capital spend and exploration budget will decline to $US16.2 billion this fiscal year.
The full-year result was announced after market close on Tuesday, when BHP shares closed 1.35% lower at $36.54, against a benchmark fall of 0.67%.
Read Stephen Bartholomeusz's analysis of the full-year BHP Billiton results here.
Miner's FY14 outlook for commodities
BHP has flagged continuing lower commodities prices in the short term but said "a lower rate of investment growth across the industry should, in time, lead to more balanced supply and demand".
Steel demand growth in Asia was expected to moderate as the Chinese economy gradually rebalances, which would support growth in demand for other industrial metals, energy and agricultural products, BHP said.
BHP said the Chinese government had "room to pursue reforms that support its agenda of stable, long term growth".
"We expect overcapacity in the aluminium and nickel industries to persist, while robust near term supply in copper and US domestic gas should, over time, give way to market conditions more influenced by resource decline," the miner said.
BHP to invest $US2.6 billion in Jansen potash project
BHP will invest $US2.6 billion over about three years into developing its Jansen potash project in Canada and is considering joint venture partners for the project.
The miner had been holding off on revealing whether it would proceed with its the project after one of the two cartels controlling the market for the fertiliser ingredient collapsed, sparking fears global prices for the commodity would fall by up to 25%.
The money will go to excavation and building works, expected to be finished by 2017.
BHP said the long term outlook for potash was strong.
"Our projections assume a shift away from the current marketing dynamic and we believe the potash price will ultimately reflect the cost of adding new supply," the miner said.
"Jansen is likely to be one of the lowest cost sources of supply once fully developed."