Mining giant BHP Billiton plc (LON:BLT) has more than doubled its interim dividend and unveiled plans for a US$2.5bn bond repurchase programme as it posted first-half results showing a big improvement in its performance.
The multi-commodity miner reported a 65% jump in underlying earnings (EBITDA) to US$D9.90bn for the six months to December 31 2016, up from US$5.99bn a year earlier.
After exceptional items, the FTSE 100-listed firm swung to a US$3.20bn profit attributable to shareholders from theUS$5.66bn loss it reported a a year earlier.
BHP raised its interim dividend payment to 40 US cents per share, a 150% boost from the 16 US cents paid in the first-half last year.
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: "This is a strong result that follows several years of a considered and deliberate approach to improve productivity and redesign our portfolio and operating model.”
He added: “We are confident in the long-term outlook for our commodities, particularly oil, with markets expected to rebalance in the near-term, and copper where we expect a deficit to emerge in the early 2020s. We have the right settings in place to substantially grow shareholder value.”
Escondida action …
The group said it remained on track for US$1.8bn of productivity gains for the 2017 financial year, excluding any impact of industrial action at the Escondida mine in Chile.
However, the group said total copper production guidance for the 2017 financial year is under review as a result of the ongoing industrial action at Escondida.
Referring to the Samarco dam collapse disaster in Brazil, BHP said that a Preliminary Agreement has been entered into with the Federal Prosecutors' Office.
The firm added: “Restart of operations (at Samarco) remains a focus but will only occur if it is safe, economically viable and has community support.”
Separately, BHP announced a repurchase plan for bonds of up to US$2.5bn, which will target 2018, 2019, 2021, 2022 and 2023 US dollar denominated notes and which it said be funded by the group’s strong US$14bn cash position.
In early trading, BHP shares gained almost 1.9%, or 26p at 1,426p.
Analysts at Liberum pointed out that BHP ‘delivered a small beat to consensus earnings’.
But, in a note to clients, they added: “Whilst the short-term demand outlook is solid, we remain cautious on expected commodity price moves from Q2 as Chinese cooling measures impact demand and supply continues to grow, in iron ore in particular.”
Liberum repeated a ‘sell’ rating on BHP.
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