BHP Billiton announces new CEO as half-year profits fall

BHP Billiton Chief Executive Marius Kloppers has stepped down as the company reported a 58 per cent fall in half-year profits due to weak commodity prices and a strong Australian dollar.

Andrew Mackenzie will take over as boss when Kloppers retires from the group on October 1st.

The announcement came just minutes before the Anglo-Australian resources giant released its results for the last half of 2012.

BHP posted attributable net profits $4.2bn, including $1.6bn in writedowns, a 58% fall year-on-year, in line with estimates.

Revenues dropped 14% to $32bn, compared to $37.5bn a year earlier, while underlying earnings before interest and tax (EBIT) fell 38%to $9.7bn. However it was slightly higher than analysts' consensus estimates of $9.65bn.

BHP declared an interim dividend of $0.57 per share, up 4% from the $0.55 cents declared a year earlier but flat versus the last half, as had been foreseen by some analysts.

The company said lower commodity prices were responsible for $5.4bn of the decline in underlying EBIT. In particular, the group was hit by a 28% drop in realised iron ore prices.

Alumina and soft nickel prices cut the value of the firm's Worsley refinery by $1.5bn and its Nickel West operations by $865m.

While commodity prices were "particularly volatile" during the six months, BHP sees improvement in the global economy supporting demand and prices.

Incoming Chief Executive Mackenzie said his focus at the miner will be on cost-cutting and spending discipline during the next half.

"It is a privilege to be asked to lead one of Australia's great companies and the world's leading diversified natural resources company," he said in a statement.

"I look forward to working closely with Marius during the transition and building on his legacy including continuing the focus on our strategy of owning and safely operating large, low cost, long life assets diversified by commodity, geography and market."

Mackenzie held senior positions in BP and Rio Tinto before joining BHP in 2008. He will be based at the group's headquarters in Melbourne, Australia.

Kloppers leaves after 20 years at the company including nearly six as chief executive.

"I've been very fortunate to lead one of the world's great resource companies. Deciding the right time to retire was never going to be easy," he said.

"I am very proud of the achievements of our company and our people. One of the first decisions I made when I became CEO was to bring Andrew into BHP Billiton, and I look forward to working closely with him, the board and the management team during the transition."

RD