BHP marks nationalist threat to global growth despite paying record dividend

BHP’s chief executive Andrew Mackenzie has warned that the rising tide of nationalist sentiment poses a threat to global economic growth and mining sector profitability, despite the company reporting a 2% rise in underlying profit for the full year 2019 and declaring a record dividend.

The world’s largest mining firm’s underlying profit for the year ending June 30 rose to US$9.12 billion from $8.93 billion a year earlier, largely thanks to higher iron ore prices and strong sales. However, this figure came in slightly below analyst expectations.

This didn’t stop BHP returning a record final dividend of 78 cents a share, in addition to the $17 billion already returned to shareholders in the 2019 financial year. The payouts follow a sustained period of financial discipline from BHP following the 2014 commodities price crash.

However, Mackenzie highlighted the ongoing US-China trade standoff as a cause for concern for the Anglo-Australian giant during a media call in the wake of the earnings announcement.

“We continue to enjoy strong sales to China. But no doubt this [trade war] will put a dampener on world economic growth. Ultimately it will impact demand for our products,” he said.

“More generally there are number of things abroad … increased nationalism, increased assertion by governments to interfere in global supply chains and capitalism … that is a consideration.”