BHP logs lowest annual profit in three years, sees slower growth

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BHP Group on Tuesday reported its lowest annual profit in three years and warned that lag effects of higher interest rates would impact growth in the developed world in the coming financial year, with demand supported by India and China.

BHP also warned inflationary pressures would continue to impact its business in fiscal 2024, with the cost of mining estimated to be above pre-pandemic levels.

“In the near term, while the outlook for the developed world is uncertain, we expect China and India to remain relative sources of stability for commodity demand,” the world’s largest listed miner said.

Over the past year, prices for iron ore, BHP’s top revenue-generating commodity, retreated from peaks over the past two years owing to headwinds facing China’s economy, while surging costs and a tight labour market in Australia also crimped earnings.

As a result, the company’s underlying attributable profit for the year ended June 30 fell to $13.42 billion from $21.32 billion a year earlier, missing a Refinitiv estimate of $13.89 billion.

BHP declared a final dividend of $0.80 per share, down from $1.75 per share a year ago, equivalent to a 59% payout. That was down from expectations by Macquarie analysts of a 65% payout.

Source: Reuters

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