Site menu

Search by ticker code:
Generic filters

Menu

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

BHP (ASX:BHP) share price on watch after profit sinks 39% in FY24 result

The BHP Group Ltd (ASX:BHP) share price is on watch after the miner reported a heavy decline of profit and reduced the dividend.

The BHP Group Ltd (ASX: BHP) share price is on watch after the miner reported a heavy decline of profit.

BHP is one of the world’s leading miners which produces iron ore, coal and copper. It’s also working on potash.

FY24 result

Here are some of the highlights from the 12 months to 30 June 2024:

  • Revenue increased 3% to US$55.7 billion
  • Underlying EBITDA grew by 4% to US$29 billion
  • Profit from operations down 24% to US$17.5 billion
  • Underlying attributable profit up 2% to US$13.7 billion
  • Attributable profit down 39% to US$7.9 billion
  • Final dividend of US$0.74, down 7.5%
  • Full-year dividend of US$1.46 per share, down 14%

BHP explained that revenue rose primarily due to higher realised prices in iron ore and copper, where sales volumes increased 3% and 5%, respectively. However, this was partially offset by lower energy coal and nickel prices, as well as lower steelmaking coal volumes after the divestment of Blackwater and Daunia.

The ASX miner experienced a global inflation rate of around 4%, driven by higher labour costs. This was somewhat offset by lower commodity-linked raw materials such as diesel and acid.

Productivity initiatives and cost discipline allowed the business to help mitigate ongoing cost pressures, with unit costs around 2.9% higher across its major assets.

BHP explained that attributable profit decreased due to an exceptional loss of US$5.8 billion, comprising a US$2.7 billion impairment of its Western Australia Nickel and a US$3.8 billion charge related to the Samarco dam failure. This was partially offset by a US$0.7 billion (after tax) gain on the sale of the Blackwater and Daunia mines. Those impairments are detractors for the BHP share price.

Cash flow and balance sheet

The company also saw net operating cashflow of US$20.7 billion, an increase 11% compared to FY23, when it made significant income tax finalisation payments relating to FY22.

BHP said its net debt reduced by US$2 billion to US$9.1 billion thanks to the net operating cash flow and proceeds from the divestment of Blackwater and Daunia.

Outlook for the BHP share price

The company believes that the long-term demand outlook for its commodities remain positive, it expects population growth, urbanisation, rising living standards and the infrastructure required for decarbonisation and electrification will “drive demand for steel, non-ferrous metal such as copper and fertilisers.”

On its important expert markets, the ASX miner said:

The Chinese economy has been volatile since the zero-Covid policy was eased in December 2022.

The March quarter saw a better-than-expected recovery in a range of sectors important to commodity demand, raising hopes of a strong year overall. However, that momentum did not carry over fully to the June quarter. That was especially the case in the steelintensive real estate sector, whereas copper-intensive sectors like automobiles, power machinery, consumer durables (e.g. air-conditioners) and the electricity grid have seen solid growth. The authorities have acknowledged that more policy support is needed to fully embed the recovery.

For FY24, the key question is how effective this latest policy push will be. The demand picture has been more balanced in India, where an investment upswing is in place and commodity demand has been accordingly robust.

The Indian economy has healthy momentum as the country moves towards a general election, which is expected to be held in the first half of CY24.

Outlook for the BHP share price

BHP shares have suffered this year, falling around 20% in 2024 to date at the pre-open price. If there’s ever a good time to invest, it’s when the share price is lower and commodity prices are weak. I like the moves to expand in copper. So, interested investors may be best served to look at the mining giant today. However, I’m cautious about the fact that Chinese demand is weak and iron supply is rising, particularly with increased African iron ore on the horizon. There are other ASX dividend shares I’d prefer to buy.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content