BHP’s Profit Slump Prompts Hefty Cut to Interim Dividend.

Bloomberg announcement

[Bloomberg] BHP Group Ltd. said first-half profit slumped 23% as China’s faltering economy dampened demand for iron ore, prompting the miner to cut its interim dividend to an eight-year low.

Underlying attributable profit for the six months to Dec. 31 was $5.08 billion, below analyst estimates of $5.39 billion.

BHP’s move to cut its dividend to 50 cents a share, down from 72 cents the year before, will reinforce speculation the board has a renewed focus on capital management as it pursues growth. Analysts were anticipating a dividend of 53.3 cents.

Impact on iShares S&P/ASX20 ETF

The impact of the BHP dividend cut on the iShares S&P/ASX20 ETF sees the Projected 12M Dividend Yield fall to 3.83% from the Last 12M Dividend Yield of 4.29%.

Impact on NQ ETFs

The dividend cut when combined with the Official Cash Rate as determined by the RBA cut to 4.1% sees the impact on Novus Quo Dividend and Capital units is as follows.

Growth exposure represents the multiplier that magnifies the upside return for Growth Unit Investors.

Effective yield represents what a dividend unit investor expects to receive when they hold to maturity.