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BHP unveils record final dividend and plans to end its London dual-listing

The miner plans to pay a record final dividend of US$2.00 per share, bringing its returns to shareholders to more than US$15bn for the full year

BHP Group PLC -

BHP Group PLC (LSE:BHP) reported a 69% jump in full-year underlying earnings, a record final dividend, plans to end its dual-listing in London, and a positive outlook for long-term commodity demand.

The world's largest diversified natural resources company also announced the merger of its oil and gas assets with Woodside Petroleum Ltd and the approval of a US$5.7bn (£4.1bn) investment in its Jansen Stage 1 potash project.

READ: BHP unveils oil and gas merger with Woodside Petroleum

READ: BHP approves US$5.7bn spend on Jansen Stage 1 potash project in Canada

“BHP is in a strong position to manage its future in a time of rapid change,” said chairman Ken MacKenzie. “We have a clear strategy and are executing against it.”

Underlying EBITDA grew to US$37.4bn in the year to end June 2021, from US$22.1bn the previous year, helped by higher iron ore and copper prices and several production records. Revenue rose 42% to US$60.8bn.

BHP’s petroleum business accounted for 6.4% of group revenue and 6.2% of underlying EBITDA for the year, down from 9.5% and 10.0% respectively for the restated year to end June 2020.

The miner plans to pay a record final dividend of US$2.00 per share, bringing its returns to shareholders to more than US$15bn for the full year.

BHP also intends to unify its dual-listed structure, allowing for a simpler separation of its petroleum assets, resulting in a primary listing in Australia and a standard listing in London.

“Following recent changes to our portfolio there has been a significant reduction in earnings contribution from PLC assets, as well as a material reduction in the expected costs of unification of approximately US$1.2bn, with one-off costs now expected to be US$400 to US$500mln,” it said.

Shareholders in PLC, the London listing, will have their shares exchanged for Ltd shares in Australia on a one-for-one basis.

If approved, unification is expected to occur in the first half of the 2022 calendar year, with the proposed petroleum merger with Woodside to follow.

BHP said it remains positive in its outlook for long-term global economic growth and commodity demand.

“Population growth, the infrastructure of decarbonisation and rising living standards are all expected to drive demand for energy, metals and fertilisers for decades to come,” it said, although it was less positive about the near term.

“The outlook for the short term remains uncertain. While momentum towards recovery remains intact across many key regions, vigilance with respect to COVID-19 risks is still a constant for all.”

It also warned that many commodity-linked uncontrollable costs have moved higher.

BHP took a US$1.2bn charge (after tax) relating to the Samarco dam failure for the 2021 financial year.

Last month a London court said it would reopen the claim by 200,000 Brazilians for £5bn in damages. The failure of Samarco's Fundao dam, a joint venture between BHP and Brazilian group Vale SA, was one of the worst mining disasters in Brazil’s history.

A suspended R$155bn (approximately US$30bn) Federal Public Prosecution Office claim is still under discussion, BHP said today.

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