BHP Group has watered down its dividend after a steep fall in first-half net income and flat underlying earnings.
The world’s largest-listed miner said in its results released late last night that its first-half net income slumped 86 per cent from the year before. Lower profit led the company to cut its interim dividend to 72 cents (52p) a share, down from 90 cents (71p) in the previous six months.
However, the firm’s underlying profit attributable to shareholders was $6.6bn (£5.2bn) for the six months ended 31 December, unchanged from the previous year, but topping an LSEG estimate of $6.42bn (£5bn).
The company had previously warned it would take a hit from the impairment of its Western Australia Nickel mine and rising costs from the fallout of the Samarco dam failure. The charges totalled $6.6bn (£5.3bn) and pushed down the company’s attributable profit by 86 per cent to $0.9bn (£0.7m).
Chief Mike Henry said: “The period also had its challenges, with adjustments relating to Nickel West, West Musgrave and Samarco offsetting an otherwise solid operational performance and overall healthy commodity prices.”
“At our Western Australia Iron Ore operations, we remain the lowest cost major producer globally and in copper we set new production records at our operations in South Australia and Chile. In South Australia, our consolidated copper province has performed strongly and we are pursuing future growth options. In Canada, we’ve sanctioned Jansen Stage 2, which will almost double our planned potash production capacity.
“We’ve seen volatility in global commodity prices and demand in the developed world has been softer than expected. That said, China demand is healthy despite weakness in housing and India remains a bright spot. In Australia, the mining industry is facing near-term headwinds in developing resources and it’s essential that the right industrial relations and fiscal settings are in place to support the sector’s ability to compete and win in global markets.
“Long term, the mega-trends playing out in the world around us continue to underline our confidence in future demand for steel, non-ferrous metals and fertilisers.”