BHP Billiton to give back $10 billion to shareholders
BHP Billiton
The Anglo-Australian giant forecast a strong outlook for commodities markets, due to tight supplies, but like its rival Rio Tinto
While we expect a slowdown in the growth rate of global commodity demand in calendar year 2011, the economic environment still underpins a robust near term outlook for our products, Chief Executive Marius Kloppers said in a statement on Wednesday.
Investors had high hopes for a big share buyback from BHP as the miner is nearly debt free, cashflows are booming and its takeover ambitions have been thwarted three times in the past three years, limiting its options for any big deals.
The $10 billion buyback, which it said would be done on- and off-market, follows Rio Tinto's plan to return $5 billion to shareholders over the next two years, which some investors considered too little.
BHP's
BHP stepped up its interim dividend by 10 percent to 42 cents a share, compared with broker forecasts of around 49 cents.
First-half earnings from iron ore nearly tripled, while earnings from base metals, including copper, jumped 45 percent.
Petroleum earnings, which set BHP apart from its mining peers, rose 23 percent.
BHP has said its acquisition sights are now focused on oil and gas targets, after failing with a proposed takeover and iron ore joint venture with Rio Tinto and a $39 billion bid for top fertilizer maker Potash Corp
over the past two years.
BHP shares surged 9 percent in the two weeks leading up to the results, touching a near 33-month high of A$47.63 on Tuesday, but are trading on a cheap forward earnings multiple of 11.9, which has 13 out of 16 analysts rating it a buy or strong buy.
(Reporting by Sonali Paul; Editing by Anshuman Daga and Ed Davies)
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