BHP Posts Weak FY Results On Lower Average Realized Price

BHP Group Ltd BHP reported an FY23 revenue decline of 17% Y/Y to $53.8 billion due to a significant reduction in iron ore, metallurgical coal, and copper prices.

Copper production rose 9% Y/Y to 1,717 kt, and the average realized price was down 12% Y/Y to $3.65/lb.

Iron ore production was up 1% Y/Y 257 Mt, and the average realized price fell 18% Y/Y to $92.54/wmt.

Underlying EBITDA fell 31% Y/Y to $28.0 billion, with a margin of 54% vs. 65% a year ago, due to a decline in prices and impacts of inflation primarily on labor, diesel, and electricity prices.

Underlying profit declined 37% Y/Y to $13.4 billion in the year.

Net operating cash flow stood at $18.7 billion, down 36% Y/Y, on lower profit from operations.

Capital and exploration expenditures came in at $7.1 billion.

Dividend: BHP declared a final dividend per share of $0.80, to be paid on September 28, 2023. This brings the FY23 dividend per share to $1.70, including an additional $1.9 billion above the minimum payout policy.

Outlook: The company expects capital and exploration expenditures of ~$10 billion per annum for FY24 and FY25, including exploration of $0.4 billion in FY24.

For FY24, BHP expects Copper production of 1,720 – 1,910 kt and Iron ore production of 254 – 264.5 Mt.

Price Action: BHP shares are trading down 1.46% at $55.48 on the last check Tuesday.