BHP Billiton will cut dividends for the first time in 15 years after reporting a $7.84 billion half year loss
BHP profits fell 92 per to $412 million from $4.9 billion a year earlier due to significantly weaker commodities prices hurting the company’s bottom line.
To combat the loss, the Melbourne based mining giant is expected to cut its dividend to approximately $2.23 billion in a bid to sure up its credit rating.
Due to the significant loss, BHP’s key commodities of iron ore, copper, coal and oil are expected to remain stagnant over the next few years.
BHP will now ensure a minimum 50 per cent payout of underlying profit at every reporting period.
“We have not made these changes lightly. They are a determined response to changing markets that will also help us take advantage of the significant opportunities ahead,” chairman Jac Nasser said.
Tim Schroeders, a fund manager at BHP investor Pengana Capital, told Fairfax Media investors were losing faith in the company.
“The board will be under close scrutiny and it will be interesting to see what they can pull out to provide a vision for the future.”
bhp hit a decade low in australia a few weeks ago..it bounced hard off of it but cutting a dividend will send the blue rinse set into a frenzy..