20th Aug 2019 06:49
(Alliance News) - BHP Group PLC on Tuesday reported an improvement in performance in its most recently ended financial year, but results were mostly below what the market had expected.
For the 12 months to June, the mining giant's pretax profit rose 2.0% to USD15.05 billion the prior year, while underlying earnings before interest, tax, depreciation, and amortisation was broadly flat year-on-year at USD23.16 billion compared to USD23.18 billion. The figure fell short of the USD23.71 billion expected by analysts.
BHP's annual revenue from continuing operations was USD44.29 billion, up 2.7% from a year earlier, but again below consensus of USD44.74 billion.
BHP is paying a "record" final dividend of 78 US cents a share, 25 cents above its policy of paying 50% of underlying attributable profit.
The total dividend for BHP's financial year was 133 cents, far higher than the 118 cents paid out a year earlier. However, it is below analyst consensus of a 236 cents return, with the market expecting BHP to double the annual payout.
The firm has further reduced net debt, with the figure falling 16% to USD9.22 billion, and below consensus of USD9.29 billion.
BHP's net operating cash flow was USD17.40 billion, 0.9% lower year-on-year.
Capital and exploration expenditure for the year was 12% higher at USD7.57 billion, in line with company guidance. BHP maintained its capex and exploration spend guidance of below USD8 billion for its recently-started financial year.
Production for the period was released in mid-July, showing copper production decline of 4% to 1.7 million tonnes, due to production outages at Olympic Dam in Australia and a lower grade from the Escondida mine in Chile.
Iron ore production for the year was slightly lower at 238.0 million tonnes, compared to 238.4 million the prior year. Metallurgical coal output declined 1% year-on-year to 42.4 million tonnes, while energy coal production fell by 6% to 27.5 million tonnes.
Lastly, petroleum production increased by 1% to 121 million barrels, mainly through a rise in natural gas output, reflecting increased barrels in Trinidad and Tobago.
"Over the 2019 financial year, underlying improvements in our operational performance were offset by the impacts of weather, resource headwinds and unplanned outages in the first half of the year," said Chief Executive Andrew Mackenzie.
"Our transformation programs have the potential to unlock significant value through more productive and stable operations, as we embrace new ways of working and harness new technology," continued Mackenzie. "We enter the 2020 financial year with positive momentum and a strong outlook for both volume and cost."
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