BHP, the world’s largest listed miner, has reported its lowest first-half profit in six years, logging an underlying attributable profit of $5.08 billion for the six months ending December 2024. This figure marks a 23% decline from the previous year, yet it slightly surpasses analysts’ expectations.
Key Highlights:
Economic Recovery Signs:
BHP’s CEO, Mike Henry, noted early signs of economic recovery in China and the impact of central bank rate cuts on the demand for steel and copper.
The company remains cautious about potential trade tensions that could affect global growth.
Acquisition Plans:
Following the abandonment of a $49 billion bid for Anglo American, Henry stated that BHP is focusing solely on organic growth options rather than acquisitions.
Financial Performance:
The reported profit is slightly above the Visible Alpha consensus estimate of $5.01 billion.
BHP declared an interim dividend of 50 cents per share, the lowest since 2017, down from 72 cents a year earlier.
Commodity Earnings:
Underlying operating earnings from iron ore, BHP’s primary profit driver, fell 26% to $7.2 billion, with the average realized price dropping to $81.11 per wet metric ton from $103.7 last year.
The company warned that full-year iron ore output from Western Australia would likely be below previous expectations due to cyclones disrupting shipments.
Copper Operations:
BHP’s copper segment saw a 44% increase in earnings, totaling $5 billion for the first half, driven by tight supply and Chinese stimulus.
The company plans to invest $4.7 billion in fiscal 2025 to expand its copper operations, anticipating a 24% increase in production over three years.
Global Demand Outlook:
BHP expects that ongoing rate cuts from central banks will help stimulate demand for iron ore and copper in developed economies.
Despite the economic uncertainties, demand for BHP’s products remains strong, with positive trends noted in China, the U.S., and India.