BHP profit surges but warns on coronavirus ‘volatility’
Australian mining giant BHP's profit soared nearly 40 per cent on the back of the boom in the price of steelmaking commodity iron ore, but warns demand could be affected by the deadly coronavirus outbreak in its biggest customer base, China.
The first round of results delivered by the mining giant’s new chief executive Mike Henry, who took the reins on January 1, showed the miner’s underlying half-year profit soared 39 per cent to $US5.2 billion ($7.8 billion), broadly in line with analyst consensus.
“Despite near term uncertainty – due to the coronavirus outbreak, trade policy and geopolitics – we remain convinced about the positive underlying fundamentals of our commodities”: New BHP chief executive Mike Henry.Credit:Eddie Jim
The bumper profit result comes after an extraordinary run for the price of the steelmaking commodity iron ore, BHP’s biggest cash generator and Australia’s top export, following strong demand from Chinese steel mills coupled with a global supply shortage last year.
BHP declared its biggest-ever half-year dividend of US65¢.
The dividend was lower than analyst forecasts of US71¢. BHP said it had taken a "cautious approach" in light of the near-term volatility posed by coronavirus.
Mr Henry said BHP was facing a period of uncertainty in the wake of the deadly coronavirus outbreak which has shut down plants and shopping ports in China, disrupting major supply chains for the resources sector, but expressed confidence in the company’s resilience
“Despite near term uncertainty – due to the coronavirus outbreak, trade policy and geopolitics – we remain convinced about the positive underlying fundamentals of our commodities,” he said on Tuesday.
“We see enormous potential to reliably deliver exceptional financial and operational performance, and to grow value and returns.”
Mr Henry said BHP had delivered a strong set of half-year results, grounded in solid operational performance.
"BHP is in good shape. We have passionate and committed people hungry to perform," he said. "We have brought together high quality assets in a simple portfolio that allows us to create value at scale."
More to come
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