BHP Sharply Raises Dividend Despite 1st Half Profit Fall

   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 [e-mail]

(END) Dow Jones Newswires

February 20, 2018 01:00 ET (06:00 GMT)

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