- Despite the "worst loss in its history" headline, BHP Billiton (NYSE:BHP) +3.2% premarket to nine-month highs after announcing a full-year dividend of $0.30, which the company says is more than the minimum under its new payout policy.
- The payout is down nearly 80% from last year's $1.24, but BHP says it is sweetening its dividend by $0.06 during H2 on top of the minimum $0.08 payout, and the new dividend is covered by free cash flow generated in the current period.
- CEO Andrew Mackenzie says BHP's free cash flows could double from $3.4B in FY 2016 to $7B next year, but that appears to be contingent upon sustaining the current uncertain commodity price rally; net debt stayed flat at ~$26B, but BHP expects net debt to fall in FY 2017.
- Investors seem to accept Mackenzie's somewhat optimistic tone taken in the earnings conference call: "There is some sense that prices have stopped falling as opposed to being in freefall, [which] means that we can continue to drive down costs and open up a margin which instead of only sharing with our customers, we can share with investment in our company and with our investors."