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MELBOURNE, Australia, Sept 17 (AFP) - Australian resource giant BHP Co Ltd unveiled a 33-percent increase in first-quarter profits Friday, and its chief executive said the outlook was improving for its businesses worldwide.
Broken Hill Proprietary has been struggling to return to profitability after its bottom line was battered by the Asian financial crisis and the ensuing slump in the commodities market.
But it released a net profit after abnormals of 466 million Australian (302.9 million US) dollars in its first quarter to August, up 33 percent on the previous corresponding quarter's 351 million dollar result.
"We are now beginning to see the emergence of a much stronger operational base which is able to immediately capture the benefits of any upswing in market forces," chief executive officer Paul Anderson said.
Anderson said most of BHP's major products continued to be affected by lower commodity prices during the first quarter and that had cut into profits by about 230 million dollars compared to the previous first quarter.
But the American, who took over the leadership of BHP late last year, said those reductions were partly offset by an increase of about 50 million dollars in average realised oil prices after the company's hedging compared with the previous corresponding quarter.
The strong first-quarter result followed BHP's release in June of the worst loss in its 114-year history, a massive 2.3 billion Australian trip into the red for the financial year ended May 31.
Anderson said, however, that he was growing more confident with the outlook for the year ahead as commodity prices improved and BHP continued to better the performance of its key operations.
"We're much more comfortable about the coming fiscal year than we were six months ago," he told reporters here.
The environment had also improved for BHP to negotiate better iron ore and coal prices with Japanese clients, in light of the improving economic situation there, Anderson said.
Chief financial officer Chip Goodyear said the company was continuing to achieve cost reductions across its copper, steel and iron ore operations.
The company recently announced a major cost reduction program at its iron ore division, called Project Phoenix, where 200 jobs are to be cut by the end of calendar 1999.