16th Aug 2022 07:22
(Alliance News) - BHP Group Ltd on Tuesday reported it nearly tripled its annual profit as a result of higher commodity prices and exceptional gains from its merger with Woodside Energy Group Ltd.
The Australian mining company reported revenue for the financial year ended June 30 rose 14% to USD65.10 billion from USD56.92 billion.
It posted an attributable profit of USD30.90 billion. This was nearly treble the USD11.30 billion achieved the previous year.
Basic earnings per share saw a similar surge, rising to 610.6 US cents from 223.5 cents a year prior.
Pretax profit was 36% higher at USD33.14 billion from USD24.29 billion and profit after tax from continuing operations rose 34% to USD34.11 billion from USD25.52 billion. This, BHP explained, was driven by higher coal and copper prices.
It noted an exceptional gain of USD7.1 billion after tax on the merger of its petroleum business with Woodside, an Australian petroleum exploration and production company.
The firm noted, however, that this gain was partly offset by a USD1.1 billion cost coming from a dam failure for its Brazilian mining joint venture Samrco Mineracao SA.
Covid-19 also resulted in a USD1.5 billion negative financial impact after tax.
"BHP delivered strong operational performance and disciplined cost control to realise record underlying earnings of USD40.6 billion and record free cash flow of USD24.3 billion. We have reduced debt and announced a final dividend of USD1.75 per share," said Chief Executive Mike Henry.
BHP's full-year payout totalled 325.0 cents, up 8.0% from 301.0 cents the previous year. It also paid a specie dividend of 386.4 cents as a result of its merger with Woodside.
"These strong results were due to safe and reliable operations, project delivery and capital discipline, which allowed us to capture the value of strong commodity prices. BHP remains the lowest cost iron ore producer globally and we delivered record annual sales from Western Australia Iron Ore," the CEO continued.
Looking forward, BHP said it was in "great shape strategically, operationally, and financially."
It said its South Flank project is currently ahead of schedule, with the firm's medium-term production guidance now revised to more than 300 million tonnes per year.
In Canada, the company said it is working to bring forward first production at its Jansen potash project to 2026.
In China, BHP said it expects the world's second largest economy to emerge as a "source of stability" for commodity demand in the year ahead as the firm anticipates a slowdown in "advanced economies" as monetary policy tightens and inflationary pressures strengthen.
BHP closed up 4.5% at AUD40.68 in Sydney on Tuesday.
By Heather Rydings; [email protected]
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