The BHP Group Ltd (ASX: BHP) share price was trading 1.88% lower today following its quarterly production update.
For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 5260, down 1.74%.
About bhp
BHP is a world-leading resources company, extracting and processing minerals (like iron ore and copper), oil and gas, and has more than 72,000 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 Billiton Plc).
BHP’s production report
Having been interrupted by COVID-19, as with the majority of companies across Australia and the globe, BHP has had safety for its staff, suppliers, and community as the main priority according to Chief Executive Officer, Mike Henry.
The Pandemic dominated the report unsurprisingly, with an explanation that some of BHP’s staff had contracted Coronavirus but had either recovered or were recovering well.
In terms of production for the March 2020 quarter, BHP reported the following (versus the same period of 2019):
- Petroleum production down 10% to 82MMboe
- Copper production up 5% to 1,310 thousand tonnes
- Iron ore production up 3% to 181 million tonnes
“While demand in China has strengthened in recent weeks, we expect other major economies, including the US, Europe and India, to contract sharply in the June 2020 quarter,”
BHP CEO Mike Henry explained.
“The situation remains fluid, however, with our strong financial position and low-cost operations, our business is resilient, with capacity to generate solid cash flow through this period and emerge well placed as the global economy recovers.”
In China, BHP said demand for materials has strengthened in recent weeks although it said it expects the markets in Europe and India to contract sharply. That sounds a little bit concerning, especially given what we’ve seen in oil markets recently.
What Happens Next?
As Australia battles with the Coronavirus and the Government keeps handing out cash, it’s nice to see BHP, along with other major Iron ore players Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) keeping things moving forward for our nation. That being said, all three companies are seeing their shares trading down 1-2% today.
We find ourselves in a situation where the country we rely on most right now is the origin of the Coronavirus and the reason our economy is at a near standstill — China.
BHP shares were last seen trading at $30.24, giving the company a market capitalisation more than $100 billion. If you’re sizing up BHP as a dividend stock — the trailing yield is over 5%, fully franked — make sure you read these two articles:
- Is BHP Group’s dividend too good to ignore?
- Washington H. Soul Pattinson (ASX:SOL) – 2020’s top dividend stock?
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