BHP, the largest Australian mining company, has slashed its interim dividend amid a slowdown in Chinese demand for shipments of the steel-making material iron ore.
Melbourne-based BHP on Tuesday posted a weaker-than-expected underlying profit of $US5.08 billion ($7.9 billion) for the six months to December 31.
BHP’s half-year underlying profit was lower than most market analysts had been expecting.Credit: Tony McDonough
Shareholders would receive a US50¢ (78.6¢) half-year dividend on March 27, the board said, which was down 30 per cent on the same time a year earlier.
The company’s half-year underlying profit was lower than most market analysts had been expecting, and reflected declines in the prices BHP earned for some of its commodities, including iron ore and coking coal.
BHP chief executive Mike Henry said the result demonstrated BHP’s “operational resilience” and ability to perform well through the price cycles. He pointed to strong production levels at the giant Escondida copper mine in Chile and its West Australian iron ore operations.
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Iron ore, the raw ingredient used by steel-makers in giant furnaces to churn out molten pig iron, remains BHP’s biggest earner and Australia’s single biggest export.
But weakening economic activity in China, the world’s biggest iron ore consumer, and deteriorating conditions in its construction sector have triggered a slowdown in steel demand in the past 12 months and pummelled the share prices of top Australian miners.
On Tuesday, Henry said signs of economic recovery were emerging.
