BHP Billiton swings to profit, boosts dividend in 1H17

BHP Billiton said on Tuesday it swung back to profit in the six months to December 31 and rewarded investors by announcing a higher than expected interim dividend.

The world’s largest miner by market capitalisation reported a net profit of $3.2bn in the first half of its 2017 financial year compared to a loss of $5.7bn a year earlier.

BHP booked an underlying profit of $3.2bn for the December half, up from $412m a year ago. The improved results reflect a resurgence in commodity prices and the company’s recovery following write offs linked to its expansion into shale oil and gas and a fatal accident at a joint venture in Brazil.

Andrew Mackenzie, BHP chief executive, said the “strong result” reflected several years of productivity improvements and a redesign of the company’s operating model.

“Our steadfast commitment to this plan has positioned us to take full advantage in a period of higher prices,” he said.

BHP said it is paying a 40 US cents per share interim dividend, which was above analyst expectations. This follows Rio Tinto’s decision earlier this month to hike dividends and announce a $500m share buyback.

The miner also announced plans to repurchase $2.5bn from five dollar-denominated bonds maturing between 2018 and 2023.

The increased returns for shareholders follow a spike in commodity prices, which boosted BHP’s underlying EBITDA to $9.9bn, up from $6.0bn in the same period a a year ago
The price of iron ore, which makes up about half of BHP’s profits, is testing two year highs above $90 – double the price 12 months earlier.

Shares closed 1 per cent in Sydney ahead of the announcement.