BHP reports lower annual profit, but long term commodity drivers remain in place

BHP, the diversified natural resources group met its guidance across its assets and set new production records in copper and iron ore, even though full year underlying attributable profit fell to $10.2 billion, well down from $13.7 billion.

- EDWARD WEST

CEO Mike Henry said, however, the year to June 30 had been “another strong year for BHP, marked by record production, continued sector-leading margins, and disciplined capital allocation.

Copper production exceeded 2 million tons for the first time, up 28% over the past three years. The group maintained its position as the world’s lowest-cost major iron ore producer at Western Australia Iron Ore (WAIO), where it delivered 290 million tons - a new production record.

A final dividend of 60 US cents per share was declared, also well down from 74 US cents at the same time last year.

In the past year, a strong balance sheet was leveraged to fund organic growth opportunities; the production guidance was achieved, it was another year of sector-leading margins, cash flow, and returns were strong, while the growth project pipeline had been re-sequenced to optimise capital allocation.

“In each of the next two years, we expect to spend $11bn in capital and exploration, reducing to $10bn on average each year between the 2028 and 2030 financial years,’ said Henry.