Mining giant Freeport-McMoRan slashes dividend by 84% citing 'volatile market conditions'
More cuts from the mining and energy sector.
In a release on Tuesday morning, $19 billion mining giant Freeport-McMoRan cut its dividend to $0.05 per share from $0.3125, an 84% reduction.
In a statement, the company said:
"The reduction in the dividend is a prudent measure to strengthen our balance sheet during a period of volatile market conditions. As previously announced, our plans include significant reductions in capital spending and other costs and we are evaluating funding opportunities for capital expenditures in our oil and gas business. We will continue to take steps to enhance our financial position and to preserve our high quality resources for improved market conditions in the future. We are optimistic about our business, long-term commodity markets and the significant values embedded in our large-scale, long-lived assets. We are committed to achieving our plans to increase production volumes and to prudently manage capital spending which will enable us to reduce debt over time and increase future returns to shareholders."
Shares of Freeport are down about 40% in the last year as the price of oil, and commodities broadly, have declined sharply since about the summer of 2014.
In January, Freeport said its capital budget would total about $6 billion in 2015, down from $7.2 billion in 2014 and said that it was, "taking aggressive actions to reduce or defer capital expenditures and other costs and has initiated efforts to obtain third-party funding for a significant portion of its oil and gas capital expenditures to maintain financial strength and flexibility in response to recent sharp declines in oil prices."
The news from Freeport follows an announcement from Whiting Petroleum on Monday night that the company would issue $1.75 billion in debt and 35 million common shares.
In pre-marekt trade on Monday, Freeport shares were down about 3%.
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