BHP H1 profits soar on prices recovery as dividend doubles

BHP said profits for the six months ending in December surged to $3.24 billion, just missing analysts' forecasts of $3.4 billion but almost 8 times higher than the $412 million posted in the same period previous year.

Underlying attributable profit was $3.24 billion or 61 USA cents per share, compared to last year's $412 million or 7.7 United States cents per share.

The company also noted net debt had fallen to $20 billion in the six-month period, from $26 billion a year ago.

As a result, the Melbourne, Australia-based miner rewarded investors with an interim dividend of 40 U.S. cents a share, higher than the 30 cents a share mandated by its policy.

BHP used the surge in revenues to slash net debt to $US20.1 billion from $US26.1 billion a year earlier.

Two things were in focus: dividends and debt deleveraging.

In the a year ago BHP Billiton PLC's stock price has increased by 0% from 0.00 to 1393.

Mr. Mackenzie said BHP is confident in the long-term outlook for the commodities it produces, particularly oil.

Shareholders will receive a dividend of US40¢, which was more than double the US16¢ paid at the same time past year, higher than the minimum amount demanded by the new dividend policy, and better than the US30¢ that analysts had expected.

This time around, BHP made a $195 million loss for the half year relating to Samarco.

Iron ore has been even stronger since the start of 2017, with the steel-making ingredient fetching $US92.34 per tonne on Tuesday.

The price of some commodities has risen, in part because of increased demand from China.

BHP recently disclosed record production of iron ore in the final quarter of 2016, positioning its to profit from the surge in the price of iron ore.

So one major pays a healthy dividend, while one pays none at all, and both share prices respond similarly to results robust in other similar ways.

"Prices are expected to return to industry marginal cost once seaborne and Chinese supply constraints are eased", BHP said.

Bernstein's Paul Gait says BHP delivered more revenue and saved more costs than expected, as the company reported its unit costs fell 10% Y/Y in conventional petroleum, including 37% at Escondida and 4% at Queensland coal. The Coal segment is engaged in mining of metallurgical coal and thermal (energy) coal. Copper chipped in $US1.74 billion, almost double the year earlier's $US829 million.

However, Mr MacKenzie said there was another factor at play: "China's improved a little bit but I would say much of what's going on in terms of the iron ore price is down to less production of iron ore elsewhere and companies like us have been able to fill that gap".

Unsurprisingly, the petroleum division saw a decline, dropping to $US2 billion from $US2.2 billion, due to the decision earlier to curtail production in the USA amid weak prices.

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