BHP lowered its dividend by less than expected with its latest half-year numbers in a sign that it is more confident over the outlook for bulk metals, said analysts.
Underlying profits for the six months to the end of December were flat at US$6.60bn and slightly better than consensus estimates beforehand, though big impairment charges reduced the total down to US$0.9bn.
BHP took a US$3.2bn hit for its share of compensation for the Samarco Dam disaster in Brazil and also US$2.5bn for potentially closing its West Australian Nickel operations.
The Aussie mining giant announced an interim dividend payment of US$0.72 against US$0.90 a year ago, but this was higher than most forecasts beforehand.
Investors should take this as “a reflection of BHP’s improving confidence regarding the outlook on commodity demand/prices", US bank Citi commented.
Earlier this week, BHP warned that the future of the Australian nickel industry was at risk due to the slump in the price of the metal despite a new initiative by the government there to support the sector.
This plan still might not be enough, BHP chief executive Mike Henry said, though he was more optimistic about the other metals it produces pointing to a recovery in Chinese demand and good growth in India.
“China demand [for iron ore and copper] is healthy despite weakness in housing and India remains a bright spot," he said
“In Australia, the mining industry is facing near-term headwinds in developing resources.
"It’s essential that the right industrial relations and fiscal settings are in place to support the sector’s ability to compete and win in global markets.
"Long term, the mega-trends playing out in the world around us continue to underline our confidence in future demand for steel, non-ferrous metals and fertilisers.“
Revenues for the six months rose 6% to US$27.2bn.