BHP wants to lift dividends: Kloppers

12 Feb 2012, 7:59 pm   -   Source: AAP
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BHP Billiton's chief executive has reassured investors of the miner's desire to lift dividends four days after posting its first profit fall in three years.

After disappointing some with flat dividend growth in the first half of 2011/12, BHP Billiton's boss reassured investors of the miner's desire to increase future dividends.

Four days after handing down the company's first profit fall in three years, chief executive Marius Kloppers told ABC TV that BHP Billiton's focus is on deploying cash into the business and maintaining its balance sheet.

Asked about the possibility of the miner's board increasing dividends while investing in a raft of projects, Mr Kloppers said higher dividends were on the board's radar.

"We do want to pay a progressive dividend that we don't cut, and only then do we consider surplus cash," he said.

BHP Billiton's $US9.94 billion ($A9.3 billion) first-half profit was down 5.5 per cent on its prior corresponding interim result of $US10.5 billion ($A9.83 billion), but lower than analysts' forecasts.

A fully franked interim dividend of 55 US cents (A51.47 cents) was declared, up from 46 US cents at the same time last year but unchanged from the previous half, which disappointed some investors.

Lower global prices for iron, copper and coal drove the profit fall, as well as the miner's valuation of deferred tax liabilities in 2010/11 which resulted in a bigger profit decline on a year earlier.

But Mr Kloppers was bullish about the timing of BHP Billiton's investments in iron ore projects at the peak of the steel cycle.

"Even if that (iron ore) price comes back a little bit more we're going to make very good returns on those projects," he said.

He said industry consolidation will continue and refused to rule out more mergers and acquisitions for the miner.

"But we're pretty busy at the moment."

BHP Billiton's iron ore and petroleum divisions contributed more than 75 per cent of $US15.7 billion ($A14.58 billion) in total group earnings during the first half.

Its petroleum division surprised with a better than expected EBIT of $US3.9 billion ($A3.62 billion) despite low US domestic gas prices.

Mr Kloppers on Wednesday would not say whether BHP Billiton would write down its US gas assets but he expected improvements in oil production to provide an offset.

Since it bought the US gas assets the price of gas has collapsed, Ivor Ries, director at EL & C Baillieu Stockbroking, said on ABC TV.

"Unless the gas price goes up in the US they're going to have to take a $US10 billion write-off."

Both BHP Billiton and Rio Tinto have "sprayed the cash and ... made seriously bad investments and now their shareholders are paying the price", he added.

Rio Tinto on Thursday reported a 59 per cent slump in calendar 2011 net profit to $US5.8 billion ($A5.39 billion) due mainly to a $US8.9 billion writedown of its aluminium business.

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