BHP profits surge 39% — declares 2nd highest dividend on record

BHP’s Escondida mine is the world’s largest copper producer located in Northern Chile. (Image courtesy of BHP)

BHP (NYSE, ASX, LON: BHP), the world’s biggest miner, released results for the second half of 2019 on Monday, announcing an interim dividend for shareholders of 65 cents per share – its second-highest on record.

The declared dividend is 10 cents higher than last year, but lower than the 71 cents projected by analysts.

Attributable profit was $4.9 billion and underlying attributable profit was $5.2 billion – up 39% from the prior period.

BHP cashed in on higher iron ore prices through 2019, with a further boost coming as China pumped more money into its economy

Profit from operations of $8.3 billion and underlying EBITDA of $12.1 billion at a margin of 56%, with production and unit costs at all its major assets on track to achieve full-year guidance, BHP said in the media release.

Net operating cash flow of $7.4 billion and free cash flow of $3.7 billion both reflect higher iron ore prices and a solid operating performance, the company said.

BHP, like its peers, cashed in on higher iron ore prices through 2019, with a further boost coming as China pumped more money into its economy to avoid an economic slowdown. Imports of the steel input were at their second-highest level ever in 2019, Reuters reported.

The coronavirus outbreak has complicated growth projections, however, just as investors hoped the signing of a U.S.-China Phase 1 trade deal would reduce friction between the world’s two largest economies.

“For the 12 months ahead, we assess that directional risks to prices across our diversified portfolio are mixed, with the duration and intensity of the novel Coronavirus outbreak a major source of uncertainty,” the miner said in a statement.

BHP said social value is an essential precondition to shareholder value – and new agreements for Escondida and Spence to transition towards 100% renewable energy sources will reduce costs and CO2 emissions.

(With files from Reuters)

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