BHP Fiscal Year Profit Jumps on Petroleum Sale, Strong Commodity Prices

By Rhiannon Hoyle

BHP Group Ltd. said its annual profit nearly tripled as it benefited from the sale of its petroleum business and strong commodity prices, but it signaled an uncertain outlook as rising interest rates take their toll on developed economies.

BHP, the world's biggest miner by market value, on Tuesday reported a net profit of $30.90 billion for its fiscal year through June, up from a profit of $11.30 billion in the same period a year earlier.

BHP declared a dividend of $1.75 a share. Its total payout for the fiscal year, of $3.25 per share, was up 8% on the year prior.

The miner recorded an exceptional gain of $7.1 billion following the merger of its petroleum business with Woodside Energy Group Ltd. It also sold some coal operations.

Underlying profit--a closely watched measure that strips out some one-time items--was up by 39% to $23.82 billion, BHP said. That beat market consensus of $20.89 billion, compiled by Vuma from 17 analyst forecasts.

Chief Executive Mike Henry said policies introduced by China to support its economy are likely to shore up commodity demand in coming months. However, developed economies are facing a slowdown as central banks raise interest rates to tame inflation, tight labor markets persist, and geopolitical uncertainty continues to weigh.

"The direct and indirect impacts of Europe's energy crisis are a particular point of concern," Mr. Henry said.

Weaker output of most of its commodities was eclipsed by the impact of strong raw material prices.

The miner was paid more than three times as much for the metallurgical coal it mines than it was in the year-earlier period, as global production struggled to keep up with demand. BHP runs the world's biggest export operation for metallurgical coal, used in steelmaking, in joint venture with Japan's Mitsubishi Corp.

Prices for its thermal coal also surged, nearly quadrupling year-on-year. While the price that BHP received for iron ore fell by 13%, it was paid 9% more for its copper and 43% more for its nickel.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

August 15, 2022 19:10 ET (23:10 GMT)

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