Shareholders reap rewards
THE nation’s two mining powerhouses BHP Billiton and Rio Tinto have showered shareholders with close to $19 billion in dividends and share buy backs since the start of the year.
BHP has become that latest mining major to reward shareholders with a major cash splash, unveiling a record final dividend worth $US3.3 billion ($4.5 billion) and flagging more bumper payments on the way.
BHP will collect $US10.8 billion from the sale of its US onshore petroleum business in the next few months and has pledged to return the proceeds to shareholders.
“With our investment plans clear and our net debt at the bottom of our target range it does mean that as we continue to build momentum in terms of cash generation then there is a good chance that a significant amount of that cash will find its way back into shareholder pockets,” chief executive Andrew Mackenzie said yesterday.
Rival Rio Tinto declared a record $US2.2 billion interim dividend and $US1 billion buyback at its half-year results earlier this month while Fortescue Metals this week unveiled the second biggest payout since it began paying dividends in 2011.
In February BHP declared a $US2.9 billion interim dividend while Rio, which reports to a calendar year, announced $US4.2 billion as a final dividends and share buybacks.
In all the mining titans have announced $US13.7 billion ($18.7 billion) in dividends and share buybacks during 2018 as they reap the spoils of years of cost cutting and reward investors after both burned billions
Net profit down 37pct to $US3.7b
Revenue up 21pct to $US43.6b
Underlying profit up 33pct to $US9.6b
Fully franked final dividend 63 US cents vs 43 US cents a year ago in failed investments made during the mining boom.
BHP’s dividend splash came despite net profit falling 37 per cent to $US3.7 billion as it absorbed multi-billion dollar writedowns associated with the sale of its US onshore shale business and restoration costs linked to a dam disaster in Brazil.
Shares in BHP dropped by close to 2 per cent yesterday after the miner halved its latest productivity target to $US1 billion amid rising industry costs.
Underlying profit, which strips out one-offs, rose by one-third to $US8.9 billion as BHP mined more minerals and got paid more for copper, oil and coking coal.
It was the best underlying profit result since 2014.
Revenue rose 21 per cent to $US43.6 billion.
BHP netted its highest profit margins across its key commodities, iron ore, copper coal and petroleum, since the peak of the mining boom in 2011.