BHP doubles down on copper growth after better-than-expected profit
BHP reports full-year underlying profit of $13.66 bln
Beats analyst consensus of $13.26 bln
Miner focuses on Chile, South Australia, Argentina copper provinces
Recasts, adds CEO comment in paragraph 4, impairments in paragraph 6, shares in paragraph 7, copper plans in paragraph 9
By Melanie Burton and Sameer Manekar
MELBOURNE, Aug 27 (Reuters) -BHP Group BHP.AX will focus on growing its copper business through existing and incoming projects after its failed attempt to buy Anglo American AAL.L, it said as it reported a better-than-expected 2% rise in annual underlying profit.
The world's biggest listed miner is pushing hard to expand in copper, given the commodity's outsize role in the energy transition and a tougher outlook for its top revenue generator, iron ore, as China's economic growth slows and supply rises.
BHP walked away in May from its blockbuster $49 billion bid for Anglo that would have significantly boosted its copper business and is now turning to other options.
"I was very clear at the time, it wasn't Plan A for us. Plan A is everything that you see outlined in these results," BHP CEO Mike Henry told reporters. "We continue with Plan A."
BHP unveiled more details around its spending and growth plans for key copper provinces in Chile, South Australia and Argentina after it posted an underlying attributable profit for the year ended June 30 of $13.66 billion, which excludes exceptional items.
That beat a Visible Alpha consensus of $13.26 billion and was ahead of the $13.42 billion profit a year ago, though on a bottom-line level it took a $5.7 billion hit from impairments to its nickel business in Western Australia and the 2015 dam collapse at Samarco in Brazil.
BHP shares were about 2% higher in early trade, outpacing the flat Australian benchmark index .AXJO.
"They have clearly laid out capex and growth expectations for copper where they are still looking at copper as a key commodity, clearly," said Andy Foster, a portfolio manager at Argo Investments. "It's just been so hard to execute large-scale acquisitions so you have to make the most of your existing assets and then look at other opportunities."
Copper accounts for about 30% of the miner's profits but that is set to increase. In South Australia it is assessing options to produce more than 500,000 metric tons of copper annually in the early 2030s, up from 322,000 tons in the last financial year.
BHP said last month it would jointly take over Filo Corp FIL.TO for its copper growth projects near the Argentine-Chilean border, paying C$4.5 billion ($3.25 billion) with Canada's Lundin Mining LUN.TO.
UK regulations bar BHP from making another offer for Anglo until November, should it still want to do so. Henry said BHP had no interest in a separate purchase of Anglo's coking coal assets.
Still, BHP said it was keeping its balance sheet flexible.
"We are comfortable to move above our net debt target temporarily to execute value accretive opportunities in the portfolio," the miner said.
Net debt stood at $9.1 billion as of June 30, roughly at the midpoint of its target range of $5 billion and $15 billion.
BHP's profit was underpinned by record iron ore output for a second year and resilient prices, which offset weak coal prices and the sale of two of its coal mines.
The miner said the outlook for iron ore in the current financial year would depend in part on how quickly and effectively Chinese policies were able to stabilise its weak property sector as well as Beijing's approach to regulating steel production.
BHP declared an interim dividend of 74 cents per share, for a full-year dividend of $1.46 per share. That was its lowest full-year dividend since the 2020 financial year but still among the top four it has declared in its history.
Reporting by Sameer Manekar in Bengaluru and Melanie Burton in Melbourne; Editing by Arun Koyyur and Jamie Freed
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.