BHP Group Ltd (ASX: BHP) shares are on the slide on Tuesday morning.
At the time of writing, the mining giant's shares are down 1% to $40.40.
Investors have been selling the Big Australian's shares after responding relatively negatively to the release of its half year results.
BHP shares lower on half year results
This morning, BHP released its half year results and revealed earnings and dividends ahead of consensus estimates.
The mining giant revealed an 8% decline in revenue to US$25.2 billion and an 11% decline in underlying EBITDA to US$12.4 billion. The latter is slightly ahead of the consensus estimate of US$12.35 billion.
BHP's EBITDA decline was driven largely by weaker realised iron ore and steelmaking coal prices, which was partially offset by higher realised copper prices.
Speaking of copper, it was arguably the star of the show for BHP during the first half. Underlying copper EBITDA was up 44% to US$5 billion, which helped to limit the damage from a 26% decline in underlying iron ore EBITDA to US$7.2 billion.
This strong form means that copper now contributes 39% of group underlying EBITDA, which is up from 25% a year ago. Management advised that this reflects a 10% increase in copper volumes and higher copper prices.
Unfortunately, with BHP's earnings falling year on year, the company's board was forced to cut its interim dividend.
It declared a fully franked interim dividend of 50 US cents per share for the half. This is down 30.5% on the prior corresponding period but slightly ahead of the consensus estimate of 49 US cents per share. BHP's dividend has an ex-dividend date of 6 March and a payment date of 27 March.
Expert opinion
Saxo Asia Pacific Senior Sales Trader, Junvum Kim, has been running the rule over the result. He told the Motley Fool Australia:
BHP Group's 23% profit decline highlights the vulnerabilities of relying heavily on Chinese demand, with earnings falling to USD 5.08 billion and an eight-year-low dividend. CEO Mike Henry's optimism about demand from other major economies provides some reassurance, but the challenges from declining commodity prices and Cyclone Zelia (in Western Australia) remain worrisome.
Despite these issues, BHP's continued low-cost production advantage and ambitious plans to expand to 330 million tonnes per annum (Mtpa) demonstrate a strategic focus on resilience and growth, positioning the company to capitalise on future opportunities.
