News

BHP Group Reports Full-Year Earnings below Expectations

4.9

Clarence L. Polk

• August 22, 2023

BHP Group, the world's largest miner by market value, announced its full-year earnings for the year ended June 30. However, the results fell short of expectations. Here are the key details:

Net Profit:

• BHP reported a net profit of $12.92 billion, missing the Visible Alpha's compilation of 15 analysts' forecasts which predicted $13.30 billion.
• This profit was also less than half of the $30.90 billion recorded in the previous year when the company benefited from the sale of its petroleum business and strong commodity prices.

Total Revenue:

• The miner reported total revenue of $53.82 billion for fiscal year 2023.
• This figure was slightly below the consensus estimate of $54.36 billion, according to Visible Alpha.
• In comparison, BHP's revenue in the year-earlier period was $65.10 billion.

Dividend Payout:

• Directors declared a final dividend of 80 U.S. cents per share, resulting in a full-year payout of $1.70 per share.
• Although this is lower than the record-breaking $3.25 per share paid in cash dividends for the previous year, BHP stated that the total for fiscal 2023 is still the third-highest ordinary dividend on record.
• The Visible Alpha consensus had suggested a total cash dividend of approximately $1.72 per share.
• BHP follows a policy of paying at least 50% of underlying attributable profit to shareholders.
• The final dividend of 80 U.S. cents per share represents a 59% payout.

Despite falling short of expectations, BHP Group remains a significant player in the global mining industry.

Projects

BHP reported a significant increase in capital and exploration expenditure for the last fiscal year, reaching $7.1 billion – up by 16% from the previous year. The company is currently conducting studies to expand its iron-ore operations in Western Australia to a capacity of 330 million tons per year, with completion expected in 2025.

Western Australia Iron-Ore Operations

Various options are being considered by BHP to achieve this expansion. These options include the development of new mines and the utilization of existing infrastructure, such as the facilities at Yandi. The company is also exploring the possibility of increasing ore beneficiation or constructing a new hub.

Escondida

Over the next 18 months, Escondida – an important project for BHP – will undertake strategic studies to counteract an anticipated decline in grades. BHP is exploring multiple options in this regard, including the potential construction of a new concentrator to replace the existing Los Colorados facility. Additionally, BHP is looking into the application of one or more leaching technologies to improve recoveries and tap into primary sulphide resources during the cathode process.

Jansen Stage 2 Project

BHP is currently conducting an accelerated feasibility study for its Jansen Stage 2 project, with completion expected in fiscal year 2024. Upon completion of the study, a final investment decision could potentially be made as early as FY24. If approved, production could commence as early as FY29.