BHP offers lowest dividend in 8 years as miner posts $8bn half-year profit

Australia’s largest miner will pay shareholders their lowest interim dividend in eight years after a massive profit slump.

Australia’s largest miner will pay shareholders their lowest interim dividend in eight years.

Inflationary pressures were a central theme in BHP’s half-year results, posted on Tuesday.

BHP recorded a $US5.1bn ($A8bn) underlying profit for the first half of this financial year – down 23 per cent.

Weak iron ore prices and steelmaking coal prices hurt the multi-continental miner, but “productivity initiatives and cost discipline” – plus favourable foreign exchange changes – allowed the company to mitigate the global 3.7 per cent inflation rate.

Union members protested outside the BHP annual general meeting in Brisbane in October. Picture: NewsWire

Around the world, growth in services outpaced industrials in 2024, leading to slowing commodity demands in many economies, it says in BHP’s results.

“The impact of policy on trade and inflation remains a key uncertainty, particularly for the United States and its trade partners,” BHP says.

“Developed economies are expected to gradually recover, as interest rates continue to be lowered, with the US economy likely to outperform other developed markets.”

BHP expects India to remain the fastest-growing major economy, and after China met its economic growth targets, Beijing will use policy to support the economy and improve domestic demand in the near future.

“Inflation has eased across our major operating regions, but we still expect lingering labour market tightness to impact the mining sector’s cost base in the remainder of FY25,” BHP says.

BHP chief executive Mike Henry says there are ‘early signs of recovery in China’. Picture: NewsWire / Emma Brasier

As a result, BHP is offering a $US0.50 per-share dividend, its lowest interim payout since 2017.

Despite boosting the amount of iron ore and copper being produced, lower commodity prices pulled BHP’s profits down. Iron ore attracted about per 22 cent less per tonne, while coking coal made about 23 per cent less per tonne.

Saxo Singapore senior trader Junvum Kim said the 23 per cent profit slide highlighted an overreliance on Chinese demand.

“(BHP) CEO Mike Henry’s optimism about demand from other major economies provides some reassurance, but the challenges from declining commodity prices and Cyclone Zelia (in Western Australia) remain worrisome,” he said.

“Despite these issues, BHP’s continued low-cost production advantage and ambitious plans to expand to 330 million tonnes per annum demonstrate a strategic focus on resilience and growth, positioning the company to capitalise on future opportunities.”

Originally published as BHP offers lowest dividend in 8 years as miner posts $8bn half-year profit