Potash-hunting BHP boosted by doubling of annual earnings

BHP Billiton, the world's biggest miner, yesterday more than doubled annual earnings, as the company at the heart of a hostile $38.5 billion (£24.9bn) takeover bid for Canadian fertiliser giant PotashCorp said it enjoyed record demand for iron ore.

Net profit for the year to end-June was A$12.7bn (7.2bn), up from A$5.9bn the year before. Net debt fell 58 per cent to A$3.3bn.

Revenue rose 5.2 per cent to $52.8bn due to record sales of iron ore, metallurgical coal and petroleum.

Despite the strong result, BHP said it was cautious on the short-term outlook for the global economy.

The company said: "Uncertainty continues to surround the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels."

On the contested takeover bid, Marius Kloppers, chief executive of the London-listed mining giant, said he would not overpay amid the Canadian group's current rejection of the bid.

Kloppers added: "I will be as disciplined on this bid as I've been on every other endeavour.

"The shareholders own the company and it's my job to create more value for them, not to do any one thing at any cost."

The BHP offer for Potash is worth A$130 a share. Analysts said that the strong financial position that the suitor outlined yesterday - with its borrowings-to-shareholders'-funds ratio a mere 6 per cent - meant BHP could raise its bid.