BHP trims payouts as nickel glut and dam disaster wipes billions from bottom-line

BHP Group has watered down its dividend after a steep fall in first-half net income and flat underlying earnings.

The world’s largest-listed miner said in its results released late last night that its first-half net income slumped 86 per cent from the year before that sparked a cut in its interim dividend to 72 cents (52p) a share, down from 90 cents (71p) in the previous six months.

However, the firm’s underlying profit attributable to shareholders was $6.6bn (£5.2bn) for the six months ended Dec. 31, unchanged from the previous year, but topping an LSEG estimate of $6.42bn (£5bn).

The nickel market glut was blamed by the world’s biggest miner as the reason for to write down the value of key assets and the company is reviewing decisions whether to suspend operations at the firm which operates a mine and smelter, after entirely writing off the unit’s value, the Financial Times reports.

“There’s going to be a multi-year period of over-supply in nickel” that could last until the end of this decade, chief executive officer Mike Henry told Bloomberg in a post-results call.

“The consideration that we need to give to nickel is what we do with our business in the intervening period, given that it’s currently loss-making and it has been for some time.”

BHP said it expects a “more balanced global economy and evidence that the worst of the general inflationary wave is behind us will have a positive impact on our industry in calendar year 2024.”