Shareholders will take a 14 per cent dividend cut as the miner funnels spending towards growth.
Already a subscriber?BHP has vowed to grow iron ore export volumes even as Chinese demand declines and has warned thatThe plan to grow market share in BHP’s most lucrative division came as the miner announced a 14 per cent dividend cut to help fund its pivot toward “future facing” commodities like copper and potash.BHP’s underlying profit rose by 2 per cent in 2023-24 to $US13.7 billion , but the miner reduced dividends both in absolute terms and as a proportion of earnings.
“As a long-term shareholder we believe they still need to reinvest in the business to grow. Yes, they could pay higher dividends but will be a bigger fall in dividends in future years as resources deplete over time,” he said. Benchmark iron ore prices fell to a two-year low below $US92 a tonne earlier this month, but have recovered to fetch $US100.10 a tonne on August 26, according to S&P Global Platts.
Mr Henry said BHP had the financial firepower and the willingness to attempt more deals if the right opportunity arose. BHP mothballed its WA nickel business earlier this year and on Tuesday reported a $US300 million loss from the division plus a $US2.7 billion after-tax impairment.BHP does not expect nickel prices to recover soon given soaring production rates in Indonesia, and foreshadowed a “multi-year run” of oversupply.
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