Energy giant BHP has posted a record final dividend of $2 per share, which has raked in a $15bn payday for its shareholders in the past year.
In a set of upbeat financials, BHP pulled in $25.9bn in profit from its operations in the year to 30 June, up from $14.4bn last year.
The profit was BHP’s best in nearly a decade amid a pandemic-induced surge in commodity prices.
Shares jumped a little over seven per cent in its early afternoon trading, to a total share price of 2,442.00.
“BHP’s performance over the past year illustrates the strength of our portfolio, balance sheet, people and performance culture. Including the record dividend announced today of $2.00 per share, we have returned over $15bn to shareholders over the past year,” BHP chair Ken MacKenzie said.
The firm also confirmed its petroleum business merger with Australian energy giant Woodside to create what its CEO Mike Henry called “a global top 10 independent energy company”.
Chairman MacKenzie added that: “The agreement to pursue a merger of BHP’s petroleum business with Woodside will maximise the value of our oil and gas assets through increased operating scale and synergies, with a more diversified product portfolio to support the energy transition.
“Now is the right time to unify BHP’s corporate structure,” he explained, as the commodities heavyweight will “be simpler and more efficient, with greater flexibility”.
A new, greener, economy
The merger, which has been forecast to be worth $28bn, comes as the mining giant said it had begun a review of its multi-billion dollar petroleum business to “re-assess” its long-term strategic position in its portfolio amid growing climate concerns.
The business appears to be looking to transition to the “new economy” and eyeing the returns on more sustainable industries, according to equity research analyst at investment management firm Quilter Cheviot, Jamie Maddock.
“BHP’s annual results show a business looking to transition to the new economy, exiting legacy industries and looking to the future for its returns.
“Its gradual exit from thermal coal and the sale of its petroleum business to Woodside is a step in this direction and certainly will help lift its ESG credentials with investors.”
A fickle beast
The group had been rocked by the turbulence in commodity prices but has ultimately come out on top.
Senior analyst at investment platform Freetrade, Dan Lane, said the mining group “painted itself as the picture of health” in its full-year financial update today.
“Record production figures in some of its iron ore, gold and copper projects put a positive spin on the numbers but Covid has clearly hit the wider operations.
“Despite the success of individual projects, guidance for next year is fairly muted. Investors will want the opposite if the copper price takes off again or there’s a sudden rush to gold.
“That might seem unfair given the year the firm has had but the market is a fickle beast and specific highlights won’t be enough if the miner doesn’t keep up with investors’ expectations in 2022.”
BHP will look to projects that focus on “future facing minerals” used in emerging sustainable alternatives like electric cars, Maddock added, “With the move away from the petroleum industry and demand for certain minerals and metals in the green economy” rising.
Basic earnings per share hit 223.5 cents, climbing from 157.3 cents a share in 2020. Meanwhile, the firm’s net debt remained mostly unchanged – down to $7.1bn from $7.6bn in the same period last year.
The CEO of the energy giant also praised that it was the group’s second consecutive full financial year with no fatalities in its operations.