The BHP Group Ltd (ASX: BHP) share price is on watch this morning after the Aussie miner slashed its final dividend by 29.5%.
What were BHP’s key takeaways?
The BHP share price will be worth watching after posting a broadly stable result across its various business units.
BHP reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) down 5% to US$22.1 billion. The Aussie miner’s underlying EBITDA margin came in at 53% for FY20.
In terms of segment performance, iron ore remains clearly the strongest contributor. Iron ore contributed US$14.6 billion (64%) of group EBITDA while copper (US$4.3 billion, 19%) was another strong contributor.
Metallurgical coal (US$1.9 billion, 9%) and petroleum (US$2.2 billion, 10%) edged lower compared to FY19 numbers due to cost, maintenance and pricing impacts.
Underlying EBIT fell 7% to US$15.9 billion with net profit totalling US$8 billion for the year. That saw underlying basis earnings per share edge 2% higher to US 179.2 cents while dividend per share fell 10% to 120 US cents.
The BHP share price will be worth watching in early trade following the dividend cut. The Aussie miner slashed its final dividend payment by 29.5% to US 55 cents per share.
Free cash flow totalled $8.1 billion with a return on capital employed (ROCE) of 17% for FY20. That was largely driven by the iron ore earnings which recorded a ROCE of 56% for the year.
Net debt of US$12.0 billion was at the lower of BHP’s target US$12–17 billion range.
The group continues to reinvest in future projects with US$5.7 billion earmarked for organic development across efficiency management, exploration and major projects.
How has the BHP share price performed this year?
All eyes will be on the BHP share price following this morning’s full-year results announcement.
The Aussie miner still managed an FY20 total dividend of US 120 cents (A$1.66) per share. Based on yesterday’s closing price of A$39.86, that represents more than a 4% dividend yield at present.
Shares in the Aussie iron ore miner are up 2.3% for the year while the S&P/ASX 200 Index (ASX: XJO) is down 9.2%.
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