The $US6.5 billion ($9.1 billion) question ahead of BHP Billiton’s full-year results on Tuesday afternoon is how the miner will protect its annual progressive dividend in the face of a painful commodity price rout.
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The FTSE 100-listed multi-commodity giant also reported large reductions in costs as it tries to battle the downturn in the mining industry, including reducing its capital expenditure budget by a further USD500 million in the 2016 financial year.
BHP increased its full year dividend by two percent to 124 US cents per share.
The Anglo-Australian mining company earned $1.91 billion (1.64 billion euro) in the period, compared with $13.83 billion a year earlier.
The company declared a final dividend of 62 cents per share.
Chief executive Graham Kerr said: “The implementation of our regional operating model and broader cost saving initiatives are already delivering strong results”. The result was below analysts’ forecasts of around $7.73 billion. It had targeted at least $4 billion of productivity gains from the core portfolio by the end of the 2017 financial year.
Adjusted earnings before interest and tax, from continuing operations, were down 61.7 per cent to $US8.67 billion, or $US11.9 billion before accounting for $US2.8 billion of exceptional items in the petroleum and potash unit.
Meanwhile Rio Tinto announced further drastic cuts in jobs and costs earlier this month as it revealed a 43 per cent fall in first half profit to £1.85billion. Underneath Mr Mackenzine, BHP Billiton has trimmed down considerably to give attention to 4 pillars: iron ore, copper, coal and petroleum liquids.
BHP’s CEO Andrew Mackenzie said that in the coming time, they are expecting ongoing economic reforms in China for the contribution in periods of market volatility.
Despite market concerns Chinese steel production had peaked, BHP remained confident it still had room to grow.
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Iron ore prices for Tianjin delivery hit a 10-year low of $US44.10 a tonne in July and are struggling to break above the mid-$US50 range, while metallurgical coal and copper, also core BHP products, are languishing at multi-year lows.
