BHP has boosted interim dividend by more than 50% after a solid performance in the six months to December, thanks mostly to higher iron ore and copper prices, the rebound in oil prices and continuing strong cost controls.
The world’s biggest miner reported a 15% rise in revenue to $US25.63 billion for the half and an 18% rise in underlying net profit to $US6.036 billion from $US5.186 billion in the December, 2019 half year.
Interim dividend was lifted to a high $US1.01 a share from 65 US cents previously in a vote of confidence from the board in the outlook.
Write off in the value of its steaming (thermal) operations in Australia and Colombia of $US2.2 billion) saw the statutory net profit fall to $US3.9 billion for the latest half year.
BHP said profit from operations was $US9.8 billion ($US8.3 billion in the 2019 first half) “higher iron ore and copper prices, record production at WAIO and record average concentrator throughput at Escondida, solid cost performance supported by cost reduction initiatives across our assets and other net movements.”
“This was partially offset by the unfavourable impacts of a stronger Australian dollar, planned maintenance, natural field decline at petroleum, copper grade decline, adverse weather and inflation.”
The total impact from COVID-19 on BHP’s operations was in the half was a pre-tax figure of $US436 million.
BHP said that figure was made up of “Lower volumes at our operated assets of $US138 million and additional direct costs of $US298 million (exceptional item) incurred, such as increased social distancing measures including additional charter flights, accommodation, security and health and hygiene services ($US200 million) combined with higher demurrage and other standby charges related to delays caused by COVID-19 ($US100 million).
BHP said that these costs translated to additional costs at its major assets of: $US1.42 per tonne at Queensland Coal, 56 US cents a tonne at WA Iron ore operations, 25 US cents a barrel of oil equivalent at Petroleum and 0.02 US cents a pound at the Escondida copper mine in Chile.
Looking to the rest of the year BHP said that that at its WA iron ore business (WAIO,) Queensland Coal and NSW Energy Coal production guidance for the 2021 financial year remains unchanged despite adverse weather impacts during January and February 2021, with Queensland Coal and NSWEC volumes expected to be at the lower half of the guidance range.
