Due to the continuous slump in the prices of oil, precious metals, and other commodities, BHP Billiton Limited (ADR) (NYSE:BHP) reported a half-year loss during the period that ended on December 31 and lowered its quarterly dividend as a part of its effort to improve its balance sheet.
BHP Billiton ended Monday’s session with a 5.46% or $1.31 gain, closing the trading day at $25.29. However, the stock tumbled 1.90% or $0.48 during after-hours.
BHP Billiton had total revenue of $15.71 billion, down from the $24.86 billion revenue from the same period last year.
The world’s largest mining company reported half-year loss $1.07 earnings per share (EPS) or a total of $5.67 billion. During the same period last year, the company had a total profit of $4.27 billion at an EPS of $0.80.
Moreover, underlying profit from operations dropped to $412 million from last year’s whopping $4.89 billion.
According to Andrew Mackenzie, BHP Billiton CEO, the economic slowdown in China and the problems within the Organization of the Petroleum Exporting Countries (OPEC) weighed on lower prices in the industry.
Furthermore, BHP Billiton reported an impairment charge worth $390 million for global taxation, $858 million for the resulting damages of the failure of the Samarco dam, and $4.90 billion against the carrying value of the Onshore US assets.
The company warned investors that weaker prices and increased volatility will persist in the midst of low commodity prices.
New Dividend Policy
BHP Billiton has revised its quarterly dividend, paying $0.16 per share compared to last year’s $0.62 dividend per share.
The struggling company is committed to maintaining a strong balance sheet, as reflected by BHP Billiton’s move to modify its dividend policy. According to Jac Nasser, BHP Billiton Chairman of the Board, the changes were made to enhance the financial flexibility of BHP Billiton.
With these efforts, the company seeks its gradual recovery in the current fiscal year. However, BHP Billiton remains uncertain given the high volatility nature of the global markets.
Jac Nasser said that BHP Billiton has returned a total of $77 billion to investors since BHP and Billiton merged in 2001, which is the most among all companies in the sector.