BHP Mining Doubles Net Profit Hitting New Records

BHP, the world’s biggest miner, more than doubled its annual net profit Tuesday on the back of higher iron ore prices and a rebound from significant setbacks the previous year.

The resources giant posted a US$8.3 billion profit for the year to June 30, up from US$3.7 billion in the previous year when heavy impairment charges related to the sale of its US shale assets and costs associated with the Samarco disaster in Brazil dented its results.

Underlying profit — its preferred measure, which strips out one-off costs and is more closely watched by the market — rose just 2 percent to US$9.4 billion, due to strong commodity prices and increased production.

The company declared a final dividend of 78 US cents, which it said was a record return of US$3.9 billion to investors and came on top of US$17 billion already paid out this financial year.

“Higher prices and record production from several of our operations contributed to strong operating cash flows,” chief executive Andrew Mackenzie said.

“We used that cash to invest in attractive growth projects, advance our exploration programmes and increase returns to shareholders.”

The result comes after prices of iron ore — which accounted for almost half of BHP’s underlying profit — jumped to US$117 a tonne earlier this year.

After the approval this month of a US$500 million oil and gas field development in Trinidad and Tobago, the company now has six new resources projects under way, which Mackenzie said “sets us up to deliver strong returns over the long term”.

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