Mining group BHP Billiton’s financial results this week were in line with market expectations, but the dividends were disappointing, one analyst said.
The Johannesburg-based analyst, who refused to be named, said while the earnings of the world’s largest diversified resources group were “broadly” as the markets had expected, no special dividends were paid.
The analyst said the full-year dividend of $0,26 a share — of which the final $0,09 is expected to be paid in September — could be seen as “light”, compared with the company’s earnings for the year ending June.
Reacting, BHP Billiton investor relations manager Michael Campbell described the complaint as “absolute nonsense. The dividends have increased by 27%, and we are still looking at the [$2-billion] capital management programme approved by the board.”
Campbell said management would be looking at “various ways” of using the money, including buying back shares, which would increase earnings per share. Billiton has three tax jurisdictions — the United States, Australia and the United Kingdom — to look at before making a decision.
The company said on Wednesday it had “set records this year, both in terms of its operations and results”.
It said its board would maintain a “strong capital discipline” but also
indicated that one of its priorities was “to return cash to shareholders, either through its progressive dividend policy or by other means”.
It added: “Record production volumes were achieved at a number of our businesses as seven new projects came on-stream and other projects romped to full production.”
Available cash flow was a record $5,2-billion. Analysts expect the company’s performance to improve as oil production increases. Company earnings, before interest and tax excluding exceptional items increased to $5,5-billion, from $3,5-billion last year.
Billiton said earnings had been offset by higher exchange rates of the rand against the US dollar and the Australian dollar.