BHP Billiton profits slump by almost a third

Profits at mining giant BHP Billiton have been hit by the falling price of iron ore, coal, copper and other commodities.

Underlying profit for the half-year to 31 December fell by 31% to $5.35bn (£3.46bn), but that was better than industry analysts were expecting.

To compensate for falling prices BHP has made deep cuts in its spending on exploration and other investment.

It spent $6.4bn during the six-month period, down 23% on the previous year.

"We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment," chief executive Andrew Mackenzie said in a statement accompanying the latest results.

"Since then, we have achieved annualised productivity gains approaching $10bn and reduced capital spending by almost 40%," he said.

BHP is planning to move its aluminium, manganese into a separate company, which will also hold nickel and silver mines and some coal mines in Australia and South Africa.

Called South32, BHP hopes to spin-off the new company in the summer following a shareholder vote.

The company has also been hit by falling oil prices.

Last month BHP Billiton announced a 40% reduction in its US shale oil operation.

By the end of June it plans to have reduced the number of shale rigs from 26 to 16.

The firm's Sydney-listed shares were trading higher in early trade on Monday.