New | BHP Billiton profit dives amid commodities rout
World's biggest miner plans spending cut to shore up dividends after earnings hit 10-year low on falling iron ore, copper, coal and oil prices
BHP Billiton reported on Tuesday its worst underlying profit in a decade, gutted by plunging iron ore, copper, coal and oil prices, and said it would cut spending more deeply to shore up dividends.
BHP and its peers have been hit after they raised output of iron ore, copper and coal just as demand growth slowed in China, the top global metals consumer, and have been slashing costs over the past three years to cope.
The world's biggest miner reiterated its pledge to never cut its dividend, and lowered its target for capital spending for the year to June to US$8.5 billion from US$9 billion previously to help meet the promise.
"Our commitment to our progressive dividend is resolute," chief executive Andrew Mackenzie said. "It has withstood many previous cycles and is a key differentiator relative to our peers."
BHP shares jumped 6 per cent in early London trade, partly reversing a 9 per cent fall in Monday's session when commodity stocks globally fell on fears of a hard landing for the Chinese economy.
The market welcomed the sharp cost cuts and the company's lower debt, which will help make the progressive dividend more affordable, three analysts said.