BHP posted a 37 percent slump in annual net profit Tuesday, hurt by heavy impairment charges related to the sale of its US shale assets and costs associated with the Samarco disaster in Brazil.
The world's biggest miner's profit came in at US$3.7 billion in the year to June 30 after taking into account the previously disclosed "exceptional losses" which amounted to a massive US$5.2 billion.
Underlying profit -- its preferred measure which strips out one-off costs and is more closely watched by the market -- jumped 33 percent to US$8.9 billion, fuelled by robust commodity prices and higher production.
It allowed the company to declare a final dividend of 63 US cents, the highest it has ever paid for a six month period.
"We have announced a record final dividend for shareholders which reflects strong operating performance, solid prices and capital discipline," said chief executive Andrew Mackenzie.
"Our balance sheet is strong, with net debt now at the lower end of our target range, and our investment plans on track across iron ore, copper, coal and petroleum."
BHP's share price dropped 1.1 percent in morning trade to Aus$32.80. But it has been surging this year and analysts said the underlying profit boded well for further rises.
"This dynamic may see analysts revising estimates upward, and could catalyse a break through four-year highs for BHP," said CMC Markets chief strategist Michael McCarthy.
The buoyant underlying result was driven by commodity price rises with copper, crude oil and thermal coal among strong performers over the year.
This has helped BHP, like other miners, rebound after a slump caused by supply gluts and a slowdown in growth in the world's top commodities consumer China.
Revenue for the year rose 21 percent to US$43.64 billion.
Among its divisions, full-year iron ore production was three percent higher, while copper output jumped 32 percent. However, petroleum production fell.
- Core operations -
Most of the impairments came from BHP's recent sale of its US shale oil and gas operations to British giant BP for US$10.5 billion, which is expected to be finalised in October.
It is a heavy loss -- the firm spent US$20 billion in 2011 to acquire the assets -- but a potential windfall for shareholders, with BHP vowing to return the funds through dividends or a stock buyback.
The move followed a push by New York-based Elliott Advisors, a significant shareholder in the company, for BHP to restructure the business, including spinning off its US oil and gas operations.
It is all part of BHP's plan to focus on its most profitable core long-life operations -- iron ore, copper, petroleum, coal and potash.
In addition to its demerger of South32 in 2015, BHP has now announced or completed more than US$18 billion of divestments over the last six years.
During the year, the miner and Vale, co-owners of Samarco, reached agreement with Brazilian public authorities to settle a 20 billion real (US$5.3 billion) civil suit over a mine collapse that left 19 people dead.
The companies also established a framework to progress a second 155 billion real claim brought by federal prosecutors in the next two years.
The settlement relates to clean-up costs and damages after the 2015 tragedy in which an iron ore tailings dam burst and unleashed a tsunami of toxic waste and buried a nearby village in Brazil's Minas Gerais region.