BHP Posts Record Annual Profit, Sees Chinese Demand Persisting
By Ambar Warrick
Investing.com-- BHP Group Ltd (ASX: BHP ), the world’s largest miner, logged a record underlying profit in fiscal 2022 as steady demand for metals in China drove strong sales of its Western Australian iron ore.
Underlying profit attributable}} for the year to June 30, 2022, jumped 26% to a record $21.32 billion, the miner said in a statement. BHP also declared a final dividend of $1.75 per share.
The strong results come on the back of robust demand for iron ore in China - BHP’s largest market.
The company expects this trend to continue through 2023, with Chinese demand expected to remain robust amid slowing demand for metals in more developed economies. Europe’s energy crisis and rising inflation are two major pain points for the miner.
“We expect China to emerge as a source of stability for commodity demand in the year ahead, with policy support progressively taking hold. At the same time, we expect to see a slowdown in advanced economies as monetary policy tightens,” said BHP CEO Mike Henry.
The Anglo-Australian miner expects output at its Western Australia Iron Ore operations to surpass 300 million tonnes of production per annum (mtpa), and is now assessing options to raise production to as high as 330 mtpa in 2023.
But overall revenue from iron ore declined to $30.63 billion in 2022 from $34.34 billion a year ago, on weaker iron ore prices in the second half of the year.
The slowdown in commodity prices was driven by weak industrial activity in China - a result of a series of COVID-19 lockdowns imposed this year.
Data on Monday also showed that China’s industrial output is on the lam- a trend that may be damaging for BHP this year. Last month, peer Rio Tinto Ltd (ASX: RIO ), which is the largest iron ore producer in the world, reported weaker underlying earnings for the first half of the year, citing a dip in Chinese imports.
BHP is attempting to diversify its interests beyond iron ore, and had bid $5.8 billion for copper miner OZ Minerals Ltd (ASX: OZL ) last week. The offer was rejected.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or