BHP Group (ASX:BHP) - CEO, Mike Henry
CEO, Mike Henry
Source: Carla Gottgens [Bloomberg]
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  • Mining behemoth BHP (BHP) has declared its biggest-ever dividend as strong iron ore demand from China drives a spike in profit
  • For the six months ending December 31, underlying profit increased 16 per cent to $7.76 billion — its best first-half result in seven years
  • Interim dividends will be distributed at $1.29 per share, bringing shareholder returns to more than $38.45 billion over the last three years
  • Chinese demand is expected to continue throughout 2021, but trade-related issues impacting the company’s coal business are not expected to be resolved any time soon
  • BHP is up 2.73 per cent to $47 per share

Mining behemoth BHP (BHP) has declared its biggest-ever dividend as strong iron ore demand from China drives a spike in profit.

For the six months ending December 31, underlying profit soared 16 per cent from $6.67 billion to $7.76 billion — representing its best first-half performance in seven years.

China’s dependence on commodity-intensive stimulus measures to sustain economic growth has sent iron ore prices to multi-year highs, while the massive COVID-19 vaccination push has brightened outlook for global trade this year.

Prices skyrocketed from around US$80 (roughly A$103) per tonne prior to the pandemic early last year to more than US$170 (around A$219) in recent months, and are now sitting at approximately US$160 (about A$206) per tonne.

CEO Mike Henry said it was a strong set of results for the first half of the 2021 financial year.

“Our continued delivery of reliable operational performance during the half supported record production at Western Australia Iron Ore and record concentrator throughput at Escondida,” he added.

While Chinese demand is expected to continue, BHP’s coal business — which is under review for either sale or spin-off — has taken a hit due to a trade dispute between Australia and China that’s not expected to be resolved any time soon.

Nevertheless, the company unveiled an interim dividend distribution of $1.29 per share, bringing total shareholder returns to more than $38.45 billion over the last three years.

Looking ahead, Henry said the global economic growth and commodity demand remains positive, “with policymakers in key economies signalling a durable commitment to growth and signalling ambitions to tackle climate change.”

“These factors, combined with population growth and rising living standards, are expected to drive continuing growth in demand for energy, metals and fertilisers,” he continued.

BHP is up 2.73 per cent to $47 per share at 5:01 pm AEDT.

BHP by the numbers
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