BHP suffers 86% profit hit, cuts dividend
Make us a preferred source
Make us a preferred source on Google
The news: Mining giant BHP reported an 86% hit to its first-half profit, after warning shareholders last week of major write-downs due to an impairment of the value of its WA nickel division, and the class action against BHP Brasil over the fatal Samarco dam disaster.
The numbers: While underlying attributable profit was in line with the prior corresponding period, BHP's attributable profit dropped 86% from USD6.5 billion ($9.94 billion) to USD900 million due to the Western Australia Nickel USD2.5 billion impairment and a USD3.2 billion charge relating to the Samarco dam failure in 2015.
BHP's revenue increased 6% year-on-year to USD27.2 billion, as the miner benefitted from higher iron ore and copper prices, as well as contributions from new mines Prominent Hill and Carrapateena.
Underlying EBITDA climbed 5% to $US13.9 billion, with iron ore and copper underlying EBITDA up 27% and 23% respectively.
BHP declared a fully-franked interim dividend of US72 cents per share, down from US90 cents per share a year ago.
The context: Compounding the two major write-downs on its earnings report, the Melbourne-based miner said it continued to experience the impacts of inflation, particularly on labour and parts, reflected in a global inflation rate of 6.3% across its operating jurisdictions in the 2023 calendar year.
The company said that the six months to December 2023 saw volatility in global commodity prices and "softer than expected" demand in some regions, as well as near-term headwinds in Australia's broader mining industry. However, BHP's CEO Mike Henry said its China and India markets continue to offer healthy demand, and long-term global trends point to stable demand for steel, non-ferrous metals and fertilisers.
The source: ASX announcement
