22nd Feb 2016 21:50
LONDON (Alliance News) - BHP Billiton PLC slashed its dividend more than 70% and adopted a payout ratio on Monday as it posted a swing to a massive loss in the first half of its financial year, in line with the ongoing turmoil hitting the mining sector.
The FTSE 100-listed Anglo-Australian miner, publishing its results in Australia, said it made an earnings before interest and tax loss of USD7.03 billion in the first half to the end of December, compared to USD7.93 billion a year earlier, as revenue dropped 37% to USD15.71 billion.
BHP's attributable loss to shareholders in the half was USD5.67 billion, swung from a USD4.27 billion profit.
In line with the dividend cut announced by rival Rio Tinto PLC, BHP slashed its total dividend payout 74% to 16.0 cents per share from 62.0 cents the year prior, a move to shore up its balance sheet as it embarks on a big restructuring to cope with the tough conditions in commodities markets at present.
BHP has adopted a dividend payout ratio providing for a minimum 50% payout of underlying attributable profit in every reporting period, with any payments to be made above the minimum to be assessed at the close of each reporting period.
BHP said its productivity across its operations continued to improve in the half, with capital and exploration expenditure declining 40% and the group now expecting to invest USD7.0 billion this year and USD5.0 billion a year earlier.
Costs declined at its Black Hawk well, Western Australian Iron Ore and Queensland Coal units in the half.
Jac Nasser, BHP's chairman, said though the group continues to believe the development of emerging economies globally will underpin commodities growth demand in the long term, "we now believe teh period of weaker prices and higher volatility will be prolonged." He said the decision to adopt a dividend payout ratio will support its financial position, "providing flexibility at the bottom of the cycle and ensuring discipline at the top."
By Sam Unsted; [email protected]; @SamUAtAlliance
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