The attributable profit of $4.4bn was attained through “disciplined cost control and strong operational performance, amid the lower price” environment, said the company. Picture: Supplied
Attributable profits in BHP rose by 376% to $4.4 billion in the half year to December, boosted by strong cost containment that offset an 8% decline in revenues for the period, with the company determining dividends of up to $2.5bn.
The company’s interim revenues fell to $25.2bn against $27.2bn in the year earlier contrasting period. There were increased sales volumes across BHP’s key commodities of copper, iron ore and steelmaking coal.
However, revenue decreased primarily as a result of the “decline in realised iron ore and steelmaking coal” prices, “partially offset” by higher realised copper prices.
The attributable profit of $4.4bn was attained through “disciplined cost control and strong operational performance, amid the lower price” environment, said the company.
Nonetheless, underlying attributable profit for the period decreased by 23% after adjusting for exceptional losses in the year earlier contrasting period.
“The Group’s Attributable profit reflects our strong underlying operational performance and disciplined cost control amid the lower price environment,” said the company.
Mike Henry, CEO of BHP said as a result of margins achieved for the half year and robust cash flow, the company was in a position to pay an interim dividend of 50 US cents per share, totalling $2.5bn.
”We continued to invest in growth, including $3.2bn in potash and copper, and have now also successfully completed the $2.0bn formation of Vicuña Corp, a 50/50 joint venture with Lundin Mining to develop the combined Filo del Sol and Josemaria copper projects in an exciting prospective region in Argentina,” he said.
Demand for the commodities that BHP mines “remains strong despite global economic and trade uncertainties” amid “early signs of recovery in China, resilient economic performance in the US and strong growth” in India.
Underlying earnings before interest, tax, depreciation and amortisation stood at $12.4bn against an Ebitda margin of 51.1%, net operating cash flow of $8.3 bn, about $5.2bn in capital and exploration expenditure and net debt of $11.8bn.
In terms of production, BHP Production raised copper output for the half year by 10% to 987 000 tonnes. Average realised prices for the sought after commodity also rose 9% to $3.99 per lb.
BHP’s iron ore production marginally rose by 1% to 131 million tons while realised prices averaged $81.11 per wet metric tonnes which was 22% lower compared to previous contrasting period.
Regarding iron ore supply, BHP said it expects supply growth from major producers to continue in the coming years.
“New iron ore projects in Africa and potentially some mine restarts are expected bring further supply pressures from 2026,” said the company.
The company invested $3.2bn into its potash and copper projects and expects to invest a further 65% of its medium-term capital into the two commodities.
BUSINESS REPORT