BHP to quit US shale business as annual profit surges
SYDNEY (Reuters) – Global mining giant BHP Billiton committed to quitting its underperforming US shale oil and gas business on Tuesday, as it posted a surge in annual underlying profit to $6.7 billion (5.2 billion pounds).
The world’s biggest mining house, which was buoyed by a recovery in industrial commodities markets, pleased shareholders by cutting net debt by nearly $10 billion to $16.3 billion and tripled its final dividend to $0.43 a share.
The profit was below expectations for $7.4 billion, according to Thomson Reuters I/B/E/S and the dividend was also slightly shy of forecasts, but the market focused on the lower debt and the company’s determination to exit US shale.
“Net debt looks very impressive … so the cash looks like it was applied to deleveraging versus extra dividends,” Shaw and Partners analyst Peter O’Connor said.
BHP joined other miners who have boosted payouts in the current earnings season to reward shareholders amid a resurgence in commodity prices. Rio Tinto and iron ore miner Fortescue Metals both paid record dividends, while Anglo American reinstated its dividend.
The miner, under pressure from some shareholders to sell the US shale oil and gas business it bought at the height of the oil boom, said it was “actively pursuing options to exit” the “non-core” business.
Chief Executive Andrew Mackenzie said the preference would be to sell the business through a small number of trade sales, but refused to give a timetable for quitting the business.