Mining giant BHP half-year profit hit by US tax charges

[SYDNEY] Higher commodity prices helped global mining giant BHP report a first-half net profit of US$2.02 billion on Tuesday, but the result was weighed down by a hefty charge from US tax reforms.

The result for the six months to December 31 was 37 per cent lower than the US$3.20 billion recorded in the previous corresponding period.

BHP announced last week it would recognise a US$1.8 billion charge from US tax reforms, although the miner said the lower corporate tax rate would have a positive impact on its American profits in the long-term.

"Higher commodity prices and a solid operating performance delivered free cash flow of US$4.9 billion," BHP chief executive Andrew Mackenzie said in a statement.

"We used this cash to further reduce net debt and increase returns to shareholders through higher dividends... We remain firm in our resolve to maximise cash flow, maintain discipline and increase shareholder value and returns." Underlying profit, a measure preferred by the world's largest miner, was US$4.05 billion, a 25 per cent jump from the prior period, but below analysts' expectations.

BHP declared a 55 US cents dividend per share, up from 40 cents previously.

The Anglo-Australian firm also recorded a charge of US$210 million from the fatal Samarco mine collapse in Brazil in 2015, a tragedy that left 19 people dead in one of the South American nation's worst environmental disasters.

The company said "significant progress" was being made on social and environmental recovery programmes after the dam failure at Samarco, which is co-owned with Brazil's Vale.

A plan announced last August to sell its US shale assets was progressing, BHP added, with initial bids expected to be received in the June quarter.

The miner spent US$20 billion in 2011 on US shale oil and gas assets, but the sector later experienced a fall in prices, hammering profits and prompting the company to announce plans to exit the business.

Shares in BHP closed 0.41 per cent lower at Aus$31.30 in Sydney ahead of the results announcement.

AFP