BHP profits soar amid sober warnings

BHP is funnelling more cash to shareholders, unveiling a higher than expected interim dividend even as it warns of concerns about the outlook for China and the US.

The mining titan yesterday reported a first-half net profit of $US3.76 billion ($5.29 billion), up 87 per cent from a year earlier, when it took a series of major one-off hits.

Its underlying profit, which strips out such one-offs, was $US3.8 billion.

The interim dividend of US55c a share was higher than expected and in line with the payout a year ago.

As the Australian dollar is weaker, local shareholders will enjoy a better payout. BHP has now announced shareholder returns of $US13.2 billion in the past six months.

“Since the beginning of 2016, we have reduced debt by $US16 billion, reinvested $US20 billion in the business and returned more than $US25 billion to shareholders,” BHP CEO Andrew Mackenzie said in a statement late yesterday.

But the miner sounded a note of caution on the world economy, and particularly the direction of the US and China. BHP said it expected China’s economic growth to slow modestly this calendar year.

“The negative impact of weaker exports will be partially offset by easier monetary and fiscal policy,” it said. “Over the longer term, we expect China’s economic growth rate to decelerate as the working-age population falls and the capital stock matures.”

The US performed strongly last year but faced less certain prospects in the near term, the group said.