BHP whacks dividend, rearranges top execs amid $5.7B H1 loss

The world’s biggest mining company BHP Billiton has announced a loss of nearly AUD$7.84 billion in its half year results amid tumbling commodity prices.

Revenues continued to plunge, dropping 37 per cent to $US15.7bn.

BHP Billiton has said it now believes “the period of weaker commodity prices and higher volatility will be prolonged”.

Mining companues such as BHP are under increasing pressure as a slowdown in China’s economy results in lower demand for key commodities, such as iron ore and coal.

BHP has adopted a dividend payout ratio providing for a minimum 50% payout of underlying attributable profit in every reporting period, with any payments to be made above the minimum to be assessed at the close of each reporting period.

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Announcing a company-wide shake-up that will see the heads of the iron ore and oil divisions step down, Jac Nasser, BHP’s chairman, said he had “not made these changes lightly”. It took an after tax charge of $858 million relating to the disaster. That was down from $13.8 billion a year earlier.

“Although management flagged a changed dividend policy, some investors may be surprised to see it slashed by around 75 per cent to US16c”, Mr McCarthy said.

The company will streamline its divisional structure down to three operating units – Minerals Australia, Minerals America, and Petroleum.

“Our new dividend policy and transparent capital allocation framework are part of a broader strategy to help BHP Billiton (NYSE: BBL – news) manage volatility”, chief executive Andrew Mackenzie said last night.

“The divestment of $US7 billion of assets and the demerger of South32 leaves us with a focused portfolio of large, low-cost, long-life assets in a set of favoured commodities”.

“Discussions on an agreement with the authorities for managing and funding long-term environmental and socio-economic rehabilitation plans are ongoing”, said Mackenzie.

It has been a horror six months for BHP, which also dealt with a deadly dam rupture at a mine it co-owns in Brazil that spewed a wall of mud and water that virtually flattening a nearby village, with hundreds of people affected and at least 17 dead.