BHP Sharply Raises Dividend Despite 1st Half Profit Fall
20 February 2018 - 5:15PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Billiton Ltd. (BHP.AU) reported a 37% fall in
first-half net profit, but said it would lift its midyear payout by
38% after resurgent commodity prices sharply boosted its cash
flow.
BHP, the world's largest listed miner by market value, said it
made a profit of US$2.02 billion in the six months through
December, which compared to a year-earlier profit of US$3.20
billion. The result was weighed down by one-off items totalling
US$2 billion, mainly due to BHP joining a parade of global firms
including Royal Dutch Shell PLC and Barclays Bank PLC in recording
large expenses linked to the U.S. tax overhaul.
Profit before one-off items was up 25% at US$4.05 billion,
slightly below the US$4.21 billion median of nine analyst forecasts
compiled by The Wall Street Journal.
Directors declared a dividend of 55 cents a share, up from 40
cents a year ago, meaning it returned nearly three-quarters of its
earnings to shareholders. The company also cut net debt by US$900
million since mid-2017, to US$15.4 billion. However, BHP didn't
follow other miners including Anglo-Australian rival Rio Tinto PLC
with a share buyback as some analysts had predicted.
Fueled by a sharp rise in commodity prices, miners are enjoying
a jump in earnings that has given them more firepower to boost
dividends, cut debt and spend on new projects and deals. It is a
stark turnaround from two years ago, when many were reporting large
losses and racing to slash costs and jettison assets amid a market
slump.
The miner has been under pressure from investors over its
strategy following a campaign by New York hedge fund Elliott
Management Corp. demanding sweeping changes including the disposal
of BHP's U.S. shale operations, which the miner is now
pursuing.
BHP is opening data rooms for potential trade buyers for assets
that include more than 838,000 acres in shale-rich U.S. regions.
The company said it expects initial bids for the assets between
March and June.
It pushed back against a renewed call from Elliott for a
unification of the miner's corporate structure featuring a dual
listing in Sydney and London.
"Currently, we consider that the costs and risks of collapsing
the dual-listed company outweigh the potential benefits," BHP
said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 20, 2018 01:00 ET (06:00 GMT)
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