BHP Profit Forecast Cut 31% by Macquarie on Prices, Production

Nov. 18 (Bloomberg) -- BHP Billiton Ltd., the world's largest mining company, had its 2009 profit forecast reduced 31 percent by Macquarie Group Ltd. because of declines in commodity prices and cuts to production. Adjusted earnings in the 12 months ending June 30, 2009 may be $16.51 billion, Macquarie analysts led by Brendan Harris said today in a report. They cut their estimate for 2010 profit by 50 percent to $13.39 billion. BHP may cut iron ore output from its mines in Western Australia's Pilbara region by 17 percent this year and coal output from Queensland may be curbed by 15 percent, Harris said. The Melbourne-based company has said slowing Chinese demand for iron ore meant about 5 percent of customers had deferred deliveries. ``We see surpluses developing in many of the major metal markets in the very near term, which is likely to sustain a strong shift in pricing and producer behavior,'' Harris said in the report. Macquarie, advising Rio Tinto Group as it fights a hostile $62 billion takeover from BHP, doesn't have a recommendation on the stock. BHP declined 0.2 percent to A$25.04 at 11:19 a.m. Sydney time on the Australian stock exchange. The company may report adjusted profit of $20.6 billion this year, according to the median estimate of 18 analysts complied by Bloomberg.