BHP and Glencore deliver investor cheer as earnings soar

Mining giants BHP Group and Glencore have revealed bumper shareholder payouts after soaring commodity prices boosted earnings.

BHP – the world’s biggest mining company – announced it would hand back more than 7 billion US dollars (£5.2 billion) to investors through a record dividend after half-year profits jumped 77% to 9.4 billion US dollars (£6.9 billion).

Anglo-Swiss rival Glencore added further cheer for investors as it unveiled 4 billion US dollars (£2.9 billion) in shareholder returns thanks to its highest ever annual underlying earnings haul, which soared 84% to a better-than-expected 21.3 billion US dollars (£15.7 billion).

The results come after a stellar year for commodity prices as the reopening of economies from pandemic restrictions has sent demand soaring for metals, gas and oil.

BHP said it would hand out a bigger-than-expected dividend of 1.50 US dollars (£1.10) a share, totalling 7.6 billion US dollars (£5.6 billion).

The payout takes its total cash returns to shareholders to more than 22 billion US dollars (£5.6 billion) in the past 18 months.

It follows a year that saw the most radical overhaul to its business since it was formed in a merger between BHP and Billiton two decades ago, with the Anglo-Australian firm abandoning its dual nationality status.

The business ditched a structure which saw it listed as two separate companies on the London and Sydney stock exchanges, instead opting for its main listing in Sydney, though it still has shares quoted in London.

BHP also agreed last August to sell its oil and gas business to Australian rival Woodside Petroleum amid a move to reduce its fossil fuels operations and focus more on commodities such as copper and nickel.

BHP chief executive Mike Henry welcomed a “strong first half” and said the firm had “made strong progress on the execution of our strategy”.

“BHP is well positioned for the future,” he added.

Glencore’s surging earnings came on the back of a 43% leap in revenues to 203.75 billion US dollars (£150.2 billion), with shares in the firm rising 4% after the results.

But the results revealed it set aside 1.5 billion US dollars (£1.1 billion) to resolve a raft of investigations involving US and Brazilian authorities.

Glencore chief executive Gary Nagle said: “In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore, reflecting rising demand for our metals and energy products.”

Its shareholder return comprises 3.4 billion US dollars (£2.5 billion) share base distribution in respect of 2021 cash flow, and 550 million US dollars (£406 million) through a share buyback.