BHP Billiton Ltd., the biggest mining company, said any breakup of the euro currency won’t affect its books because its sales and trade exposures are denominated in dollars.
“We do all of our books in American dollars - all of our trade exposures are U.S. dollar denominated, our bank loans are U.S. dollar denominated, our bonds have been swapped to U.S. dollars so from all of those perspectives, we don’t really see any real impact,” Marius Kloppers, chief executive officer of the world’s 14th-largest listed company, said today on a call with reporters. “The biggest thing on the breakup of the euro, should it eventuate, is just more what happens in terms of global dynamics, global growth, global credit flow.”
The sovereign-debt crisis is dragging on global economic growth, causing equity and asset prices to fall as well as prompting households to spend less. Investor concern the euro is at risk is mounting as bond yields in the 17-nation bloc rise to records and costs to insure its members against default jump.
The crisis is hampering European banks, usually major providers of trade finance in Asia, from lending funds, Kloppers said on the call. Heightened volatility and an uncertain economic outlook will put pressure on commodities markets even as long-term demand remains strong, he said at the Nov. 17 shareholders meeting in Melbourne.
Rio Tinto Group, the second-biggest mining company, said today continuing stress in the euro zone and a weaker outlook for the U.S. economy are affecting customer sentiment, which has become more negative in recent months.
BHP sold $3 billion notes on Nov. 16, its first bonds since 2009, cutting relative borrowing costs in half as investors reward Australia’s biggest company for surging exports to China.
“The balance sheet is pristine,” Alex Vanselow, BHP’s outgoing chief financial officer, said on the call. “We just did a $3 billion bond issue. So that builds another layer of security into the balance sheet.”
Vanselow, 49, will be replaced by Graham Kerr, 40, who was most recently president of diamonds and specialty products, BHP said today.