BHP will pay its lowest interim dividend in eight years after a 23 per cent drop in underlying profit, amid a weak demand from China for the raw materials used for making steel.
The Big Australian will pay shareholders an interim dividend of US50 cents ($A0.78) per share, down from US72 cents ($1.13) per share a year ago.
BHP said on Tuesday it made $US5.1 billion in underlying profit for the six months to December 31, down from $6.6 billion a year ago.
Revenue was down eight per cent to $US25.2 billion, due to lower iron ore and coking coal prices, partially offset by higher copper prices.
Iron ore and coking coal are, of course, two key components for steelmaking, and BHP said that while the global economy grew 3.2 per cent last year, services outperformed industrial activity, which had led to slowing commodity demand in many economies.
Central bank's ongoing rate cuts are expected to translate into a recovery for steel and copper among the world's most developed countries in the near term, BHP said, but potential trade tensions pose a risk to the recovery.
"The trajectory of the world population growing from eight billion today to 10 billion in 2050, with more people living in cities, together with the energy transition and the growth of data centres and AI, will compound the need for more metals and minerals," BHP chief executive officer Mike Henry said.
Saxo Asia Pacific senior sales trader Junvum Kim said that BHP's 23 per cent profit decline highlighted the vulnerabilities of relying heavily on Chinese demand.
While Mr Henry's optimism about demand from other major economies provided some reassurance, the challenges from declining commodity prices remained worrisome.
"Despite these issues, BHP's continued low-cost production advantage and ambitious plans to expand to 330 million tonnes per annum (of iron ore production) demonstrate a strategic focus on resilience and growth, positioning the company to capitalise on future opportunities," Mr Kim added.
BHP noted that it paid $US4.8 billion in taxes and royalties over the half year, at a global adjusted tax rate of 36.4 per cent - 44.2 per cent once revenue and production-based royalties are included.
In opening trade, BHP shares were down 0.7 per cent to $40.50.
