(MENAFN- ProactiveInvestors) (NYSE:BHP) advanced in morning trades after the world’s biggest mining company reported better-than-expected earnings in its first half a boosted dividend and flagged further belt tightening to withstand the tough conditions.
ADRs jumped 5.3 percent to $52.16 at 10:11 a.m. in New York paring loss over the past six months to 25 percent.
The Melbourne Australia-based mining giant said in a statement that half-year profit fell 47 percent year-over-year as prices for all its main products collapsed.
Profit fell to $4.27 billion or $0.80 per share for the first half from $8.11 billion or $1.52 per share in the same period last year.
Excluding exceptional items underlying attributable profit for the first-half was $5.35 billion or $1.01 per basic share compared to $7.76 billion or $1.46 per basic share in the prior-year period.
Pre-tax profit was $8.59 billion for the period down from $12.41 billion last year.
Revenue for the first half declined 11.9 percent to $29.90 billion from $33.95 billion in the same period last year.
Revenue from group production was $28.87 billion lower than $32.21 billion recorded in the previous year.
However group production for the first half improved nine percent with records achieved for eight operations and five commodities amid a ramp up of major projects. The company said it remains on track to deliver group production growth of 16 percent over the two years to the end of the 2015 financial year.
The company again cut its targets for capital spending and said it would reap savings of $4 billion in the three years to 2017 shoring up cash flows so it could stick to its policy of not cutting dividends.
"We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on efficiency and lowering our investment" chief executive Andrew Mackenzie said in the statement.
"Since then we have achieved annualised productivity gains approaching $10bn and reduced capital spending by almost 40%" he said.
BHP is planning to move its aluminum manganese into a separate company which will also hold nickel and silver mines and some coal mines in Australia and South Africa.
Called South32 BHP hopes to spin-off the new company in the summer following a shareholder vote.
The company has also been hit by falling oil prices. Last month announced a 40 percent reduction in its US shale oil operation. By the end of June it plans to have reduced the number of shale rigs from 26 to 16.
The company declared a 5 percent higher interim dividend for the first half of 62.0 cents per share fully franked payable on March 31 to shareholders of record as of March 13.
"We are confident that we can maintain our progressive dividend policy and continue to selectively invest in projects that offer compelling returns" Mackenzie said.
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