BHP profit, dividends take a hit as prices fall for Australia's mining exports
The Melbourne-based mining giant on Tuesday said it had earned an underlying profit of $US10.2 billion ($15.7 billion) in the year to June 30, its smallest profit in five years. It comes as Donald Trump's trade wars continue to cast a cloud over the global economy and the outlook for Australia's most lucrative mining exports.
Falling revenue across the year was 'primarily due to the decline in coal and iron ore prices', the company said in a statement to shareholders.
BHP earns most of its money from digging up iron ore in Western Australia and selling it to China to be processed into steel. However, demand in China has been starting to cool, as its property sector battles an oversupply crisis, weakening steel production rates and subduing demand and prices for iron ore. The glut has also pummelled the price of BHP's exports of metallurgical coal, which is used to fire steel-making furnaces.
Still, the Australian miner's full-year result was in line with analysts' expectations.
Shareholders will receive a final dividend worth US60¢ a share, taking BHP's payout for the year to $US1.10 a share. While that's better than analysts had expected, it's the lowest full-year payout since the year ended June 2017.
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Chief executive Mike Henry said the past 12 months had been a strong year for BHP, with the company delivering strong outcomes against a 'backdrop of global uncertainty'.
The outlook for some of Australia's largest mining and energy companies has deteriorated since April, when the US imposed across-the-board tariffs at much higher rates than many had been expecting, leading to increased uncertainty and lower global growth forecasts.
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