MAJOR shareholders in BHP Billiton appear to have won their long battle to win a greater slice of profits, with returns to shareholders rising 11 per cent in the same year the company's profit slumped by 35 per cent.
BHP announced the improved dividends on the same day it removed an estimated $60 billion in expansion spending from its short-term horizons, as so-called ''mega'' growth projects at Olympic Dam, Port Hedland and Jansen in Canada were put on the backburner for 12 months at least.
While the market had expected delays to those growth projects for some months, the announcement still marks a stunning change of attitude from BHP in the space of 10 months.
As recently as February the company committed $US917 million to preparatory works for the Port Hedland outer harbour expansion, while a similar tranche of $US1.2 billion in early spending was dedicated to Olympic Dam in October.
The company last night said the unspent portions of those ''pre-commitment'' spends would be ''redeployed into the business''.
BHP chief executive Marius Kloppers insisted none of the projects had been axed completely, with a review of the Olympic Dam proposal to try to find new technologies and cheaper ways to finally exploit the massive copper, gold, silver and uranium deposit.
Mr Kloppers said there would now be a ''dual strategy'' for increasing export capacities for iron ore at Port Hedland, with improvements to the existing ''inner harbour'' to be prioritised.
Despite sliding prices for iron ore,
Mr Kloppers said the company continued to sell 100 per cent of its production but did not see much hope for the price to improve significantly in the short term.
There may yet be more bad news ahead for BHP, with long-expected write-downs to the value of its aluminium assets not made in yesterday's results, despite the division making a loss of $US291 million.
Mr Kloppers indicated closures and divestments were likely to be a feature of the year ahead.
''You have seen today that we are going to stick to our long-standing commitment that says if it doesn't produce cash and if we don't see it producing cash in short order we are going to shut capacity,'' he said.
''If you shut high-cost capacity, your average costs go down and you are likely to see some of that over the next 12 months.''
He also added that the coal sector on Australia's east coast had been the commodity to suffer the most significant erosion in profit margins.
Major shareholders such as BlackRock have been publicly agitating for companies such as BHP and Rio Tinto to return more of the spoils of the commodity boom to shareholders, and their message appears to have been heard, with a US57¢ final dividend taking the full-year dividend to US112¢.
Despite commodity prices trending lower in recent times, Mr Kloppers said expectations the company would increase the volume of its exports - particularly in copper - had given the board confidence to increase the dividend.
''It's really that volume growth at more modest prices that prompted us to continue increasing our progressive dividend at this particular moment in time,'' he said.
CLSA analyst Hayden Bairstow said shareholders should be happy with the Olympic Dam decision.
''Shareholders have been calling for BHP to be more conservative on capital allocation, and delaying Olympic Dam expansion is exactly that,'' he said.