Top global miner BHP Billiton cut its interim dividend by 75%, abandoning a long-held policy of steady or higher payouts as it braces for a longer than expected commodities downturn.
The end to BHP's "progressive" dividend policy came as the world's biggest diversified miner slumped to a net loss of $5.67 billion for the six months to December 31.
This was its first loss in more than 16 years.
"We need to recognise we are in a new era, a new world and we need a different dividend policy to handle that," the company's chief executive Andrew Mackenzie said on a media call.
He warned of a prolonged period of weaker prices and higher volatility.
The dividend cut to 16 cents was more severe than market expectations for a payout as high as 35 cents.
BHP pledged a minimum 50% payout of underlying profit going forward.
Mackenzie said the shift was part of a broader strategy to help BHP Billiton manage volatility.
"The financial flexibility we will gain as a company from this move will allow us to invest counter cyclically," he said. "It will allow us to look at tier one assets in distress."
The CEO also announced a revamp of BHP's corporate structure in a bid to simplify operations, creating US and Australian mineral divisions in a move that will see its iron ore chief Jimmy Wilson and petroleum head Tim Cutt depart.
The company said its underlying attributable profit plunged to $412m from $4.89 billion a year earlier, missing analysts' forecasts for around $585m, as commodities prices plummeted to multi-year lows.
Despite the tough outlook, Mackenzie said BHP was still generating EBITDA (earnings before interest, tax, depreciation and amortisation) margins of 40%, which is ahead of the reported figure of around 34% for rival Rio Tinto.
At today's spot prices, the company would expect to generate $10 billion in operating cash flow for the year, he said.
BHP's results included an after tax charge of $858m following a dam disaster in Brazil at its Samarco joint venture with Vale, which killed 17 people in that country's worst environmental disaster.
A total of $6.1 billion of exceptional items included an impairment charge of $4.9 billion against the carrying value of its US onshore oil and gas assets and $390m for global taxation matters.
Mackenzie said there were no immediate plans to expand shale operations in the US, but BHP remained committed to the business.
