BHP cuts dividend to 8-year low as Chinese demand | World Mining

BHP cuts dividend to 8-year low as Chinese demand – World Mining News

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BHP has warned that “potential trade tensions” pose a risk to world financial growth after the world’s largest mining company cut its interim dividend to the bottom degree in eight years as a result of of weak Chinese demand.

The Australian company reported an 8 per cent decline in income to $25.2bn within the six months to the top of December as a consequence of decrease costs for commodities, together with iron ore and steelmaking coal.

The company’s revenue earlier than tax elevated to $8.7bn from $4bn however its underlying attributable revenue declined 23 per cent to $5.1bn — its lowest since 2020 — as a result of of decrease income and distinctive losses associated to legal settlements and the closure of its nickel operations. 

The miner cut its dividend to 50 cents a share — its lowest payout since 2017 and down from 72 cents within the first half of the financial 12 months. That $2.5bn return to shareholders represented a 50 per cent payout of the money generated within the half-year period.  

Junvum Kim, a trader with Saxo Asia Pacific, mentioned BHP’s underlying revenue decline and decrease dividend “highlights the vulnerabilities of relying heavily on Chinese demand”.

Mike Henry, chief government of BHP, mentioned robust money era was “a real hallmark” of BHP, including that the company had returned $83bn to shareholders since 2016 and more than $100bn when together with the demerger of its oil and fuel operations which have been mixed with Woodside. 

Henry pointed to “early signs” of a restoration in demand in China, the place weak point within the property sector had decreased demand for commodities such as iron ore. 

The “pro-growth stance” of Beijing’s stimulus insurance policies was driving “green shoots” within the Chinese financial system, he mentioned, including that the nation’s property sector had been stabilising, with “momentum building into 2026”.

The company mentioned world demand continued to be comfortable last 12 months as a result of of “sluggish” industrial exercise, however that cuts in rates of interest would drive a near-term restoration in metal and copper demand.

However, it sounded a observe of warning over a potential upheaval in world commerce. “Potential trade tensions present a risk to the recovery in developed economies and across the globe,” it mentioned in its outlook.

Henry mentioned the US solely accounted for 3 per cent of its income and that he anticipated a rebalancing of the worldwide market to mirror the imposition of tariffs by the US beneath President Donald Trump and different international locations.

“It is very, very uncertain. Nobody knows where things are going to land,” he mentioned.

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Ahead of Australia’s subsequent election, due by May, Henry argued that the nation needed to work to appeal to investment into its mining sector with governments within the US and Argentina having moved to decontrol.

“This isn’t a static game. Other countries are taking bold steps to be more competitive. There’s an opportunity for Australia to lean into this,” he mentioned.

BHP shares opened 0.5 per cent larger on the Australian market.

Paul McTaggart, an analyst with Citigroup, mentioned the company’s earnings have been according to expectations and the profitability of the respective divisions had “no surprises”.

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