BHP pays out record dividend as iron ore price surge boosts profits

BHP on Tuesday posted its best full year figures for five years and handed out a record dividend as it cashed in on higher commodity prices.

Underlying profit rose to $9.12bn from $8.93bn year on year, but was still lower than expectations of $9.4bn. The company announced a dividend of 78 cents a share, meaning that it will hand back $3.9bn to investors in addition to $17bn already announced.

Profits were boosted by the sale of BHP's shale gas business and soaring iron ore prices as global supply was restricted due to a dam collapse in Brazil and a cyclone in Western Australia.

Chief executive Andrew Mackenzie said the company was reviewing its thermal coal operations, but did not give any timetable on when and if would be sold.

“Over the 2019 financial year, underlying improvements in our operational performance were offset by the impacts of weather, resource headwinds and unplanned outages in the first half of the year,” he said.

“Higher prices and record production from several of our operations contributed to strong operating cash flows. We used that cash to invest in attractive growth projects, advance our exploration programs and increase returns to shareholders.”