SYDNEY – Mining giant BHP Billiton (BHP.AX) (BLT.L) rewarded shareholders with a bigger than expected payout on Tuesday, reflecting a growing confidence across the sector as rising commodity prices delivered a cash windfall.
BHP and other miners are basking in a welcome surge in commodity prices on the back of a renewed appetite in China for imported raw materials, with iron ore prices climbing more than 80 percent in 2016 and coal up as much as 300 percent.
However, BHP chief executive Andrew Mackenzie said the company’s No. 1 focus was still on paying down debt, highlighting an uncertain economic and political outlook. “We preferred, on balance, most of it (extra cash) to go toward the strengthening of our balance sheet,” Mackenzie told reporters. “But we were very keen to signal to our shareholders our commitment to strong cash returns.”
BHP’s underlying first-half net profit galloped nearly eight-fold to $3.24 billion from $412 million a year earlier, just missing market forecasts for $3.4 billion.
It declared a first-half dividend of 40 cents, up from 16 cents a year ago, outpacing a consensus of 34 cents per share.
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