BHP Billiton chops interim dividend to the bone

23rd Feb 2016 07:10

(ShareCast News) - After absorbing a half-year loss of $5.67bn, BHP Billiton sliced its dividend deeper than most analysts predicted and adopted a new more cautious payout policy as it hunkered down for what it believes will be a prolonged period of low and volatile commodity markets.The Anglo-Australian colossus also cut its capital and exploration spending by 40% to $3.6bn, which combined to help keep its half-time net debt at $25.9bn in line with consensus forecasts for the six months to 31 December.In line with a new dividend policy designed to protect the balance sheet, and net cash flow shrinking 45% to $5.3bn, BHP chopped its interim payout by almost three quarters to 16 cents from 62 cents a year before. The consensus of analyst forecasts pointed to a 35 cents payout.The new dividend policy is to provide a minimum 50% payout of underlying attributable profit at every reporting period, which represented 4 cents, with an extra 12 cents to soften the blow this time."We have not made these changes lightly," said chairman Jac Nasser. "They are a determined response to changing markets that will also help us take advantage of the significant opportunities ahead. We remain strongly committed to returning cash to our shareholders and in every reporting period, the board will assess the possibility of returning additional cash over that implied by the 50% payout ratio, as we have done this period."As crumbling commodity prices led to revenue shrinking 37% to $15.71bn, continuing operations during the period generated underlying earnings before interest, tax, depreciation and amortisation of $5.99bn, a decline of 54%, with underlying attributable profits plunging 92% to just $412m and underlying earnings per share down by the same degree to 7.7 cents.-- More to follow --