Mining giant BHP Billiton is considering slashing its dividend in the new year, as the commodities rout shows no sign of abating.
The Anglo-Australian group was placed on review facing a possible downgrade by ratings agency Moody’s, prompted by “the precipitous decline and persistent weakness in commodity prices”.
Moody’s said it will specifically review BHP’s “ability and willingness to reduce its ongoing dividends”, and added: “In the unlikely event that BHP Billiton takes no material countermeasures, the firm’s ratings are very likely to be downgraded.”
Analysts at Credit Suisse last week said the firm must cut its payout by 50 per cent.
BHP is one of the few FTSE miners to have avoided joining the so-called 90 Per Cent Club this year, although its shares have lost 70 per cent of their value over the past five years.
The company declined to comment.