BHP first-half revenue and dividend fall on weaker commodity costs

BHP mentioned its underlying attributable revenue–a intently watched measure that strips out distinctive objects for instance the underlying efficiency of the enterprise–totaled $6.60 billion, down 32% on the year-prior interval. The market anticipated an underlying revenue of roughly $6.82 billion, in keeping with 15 analyst forecasts compiled by Vuma Financial.

“Predominantly, it’s a price equation,” Chief Executive Mike Henry informed reporters on a name.

Directors declared an interim dividend of $0.90 a share, in comparison with a file midyear payout of $1.50 a share a 12 months in the past. The market had anticipated a dividend round $0.88 a share, in keeping with the Vuma consensus estimates.

“It’s still a pretty big number, fifth highest ever for us,” Mr. Henry mentioned.

He mentioned BHP and Mitsubishi Corp.,
8058,
+1.73%
a joint-venture companion, have began searching for a purchaser for his or her Daunia and Blackwater coal mines. The three way partnership is the world’s largest exporter of steelmaking coal, from mining operations in Australia’s Queensland state.

Those two mines would wrestle to compete for future funding inside BHP, which has beforehand mentioned it desires to give attention to solely the very best high quality steelmaking coal, mentioned Mr. Henry.

“What we are doing here is further concentrating our portfolio on the best-of-the-best assets,” he mentioned.

BHP has been looking for to extend its publicity to commodities resembling copper that it expects to be in excessive demand because the world decarbonizes and electrifies.

The firm in December signed an settlement to purchase Australian copper miner OZ Minerals Ltd. in what can be its greatest acquisition in additional than a decade. The OZ Minerals board has unanimously really useful shareholders vote in favor of the deal, which provides the corporate an enterprise worth of about 9.8 billion Australian {dollars}, or roughly US$6.8 billion.

Mr. Henry mentioned he expects the OZ Minerals shareholders to vote on the deal in April.

The firm can also be advancing one main improvement: its Jansen potash venture in Saskatchewan, Canada. On Tuesday, BHP mentioned it has accelerated research on a second-stage of that improvement, and would anticipate to complete a feasibility research in fiscal 12 months 2024.

The first stage of the event is on observe versus a revised plan for first potash output in 2026, the corporate mentioned.

BHP’s first-half earnings decline primarily mirrored a downswing in commodity costs within the six-month interval.

Prices for iron ore, BHP’s most profitable commodity, tumbled to a three-year low late final 12 months amid considerations in regards to the state of China’s property market and the outlook for the worldwide financial system. The common value the miner obtained for its iron ore was 25% beneath the year-prior interval.

For its copper, one other core enterprise, the miner was paid 19% lower than the identical interval in 2021.

In current months, costs for these commodities have been rising as soon as extra, as China has sought to stabilize its real-estate market and emerge from nearly three years of strict Covid-19 controls.

Mr. Henry mentioned BHP is optimistic on the outlook for commodity demand this 12 months, in huge half due to China’s projected financial restoration. China and India ought to counterbalance an financial slowdown within the U.S. and Europe, he mentioned.

“We now have even greater conviction that China will be a stabilizing force for global economic growth over the remainder of this year,” Mr. Henry mentioned.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com