Shares in Australia’s largest miner BHP Group Ltd (ASX: BHP) are down 3% this week following the release of the company’s quarterly activities report and its Annual General Meeting held in London yesterday .
About BHP Group
BHP is a world-leading resources company, extracting and processing minerals (like iron ore and copper), oil and gas, and has more than 62,000 employees and contractors, primarily in Australia and the Americas. Headquartered in Melbourne, BHP has shares listed on both the ASX and London Stock Exchange (BHP Group PLC).
Annual General Meeting
BHP Group PLC held its AGM in London yesterday at 11:00am local time. As a dual listed company, the mining giant is holding BHP Group Limited’s AGM in Sydney on 7 November 2019. The British component of the dual-listed structure accounts for about 40% cent of the share register.
Ken MacKenzie, who has been the BHP Chairman for 2 years now, first commented on safety. Mining can be dangerous, and tragically, an incident occurred in a Queensland mine in December last year with BHP unable to determine the cause. CEO remuneration is sometimes linked to safety, which contributed to CEO Andrew Mackenzie’s first pay cut this year since becoming the CEO in 2013.
In his speech, Mr MacKenzie said “we believe that a zero fatality workplace is possible and we will do all we can to achieve that outcome”.
Mr MacKenzie commented on the company’s FY19 performance where it delivered record cash returns to shareholders. EBITDA of US$23 billion at a margin of 53% contributed to strong operating cash flows which, after investment, converted into free cash flow of US$10 billion.
Is The BHP Share Price A Buy?
2019 was a good year for the financial performance of BHP. However, on a 6 month basis, shares are down 9%. Further, on a 1 year basis, shares are up only 5%, underperforming the sharemarket as measured by the S&P/ASX 200 (INDEXASX: XJO) by around 7%.
For investors wanting exposure to miners, BHP and fellow resources giant Rio Tinto Limited (ASX:RIO) are great options. Both companies operate some of the lowest cost mines in the world.
However, I find it difficult to value mining business due to the volatility of commodity prices, currencies and margins. If, like me, you prefer to look at businesses that aren’t price takers, you may be interested in some of the shares in the free report below.
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At the time of writing, David does not have financial interest in any of the companies mentioned.
