Like rival Rio Tinto, BHP yesterday reported a rebound in iron ore output in the fourth quarter after Cyclone Veronica hit production in March.
And, looking into the new 2019-20 financial year, BHP has forecast modest output growth – weather, cyclones and production mishaps notwithstanding.
BHP forecast iron ore production at 273 million to 286 million tonnes for 2019-20, a rise of between 1% and 6% from 2018-19 production of 270 million tonnes.
That was which was down from 275 million tonnes for 2018. The fall was due to the train derailment in the Pilbara last November and the impact of Cyclone Veronica in March.
But ahead of the release of its 2018-19 profit next month, the global mining giant warned of $US1 billion in productivity losses for 2019, flowing from disruptions to operations across its commodities.
BHP said yesterday that $US1 billion figure excludes the impact of Cyclone Veronica on the company’s West Australian iron ore operations.
Investors liked the numbers in yesterdays report and sent the shares up 1.4% to $41.74.
BHP on Wednesday revealed it met its revised target for iron ore production in 2018-19.
While iron ore output dipped slightly to 71 million tonnes during the June 30 quarter, compared with 72 million tonnes a year earlier, that was 12% up on the March (of 2019) quarter.
BHP’s average iron ore price across the year rose from $US55.62 a tonne to $US66.68 a tonne, a smaller rise than Rio’s $US57.90 a tonne to $US78.50 a tonne in the June half-year.
Besides iron ore, BHP met its guidance for copper for the June 30 financial year and exceeded full-year production guidance for petroleum.
According to Bloomberg analysts reckon BHP will report a full-year net profit of $US10.26 billion ($A14.59 billion), which would be well ahead of fiscal 2018’s $US8.93 billion result.
If that happens it will almost certainly see higher dividends for shareholders and perhaps another capital return.
CEO Andrew Mackenzie said the miner’s strong production lift in the June quarter was “driven by strong operational performances across our portfolio, including annual production records at a number of our petroleum, copper, iron ore and metallurgical coal operations. ”
“Our overall production was broadly in line with last year, overcoming the impacts of weather, grade and natural field decline, and unplanned outages in the first half,” he said in yesterday’s statement.
