BHP Posts 4% Profit Drop, Wants to Stop Mining Thermal Coal
17 Agosto 2020 - 7:24PM
Noticias Dow Jones
By David Winning
SYDNEY -- BHP Group Ltd. reported a 4% drop in annual net
profit, and said it wanted to stop mining thermal coal and would
seek buyers for some older oil and gas assets.
BHP, the world's largest listed miner by market value, reported
a net profit of $7.96 billion for the 12 months through June, down
from $8.31 billion a year earlier. The result was dragged down by
$1.1 billion in one-off charges, including costs tied to its
coronavirus pandemic response.
The company said its underlying profit fell by 1% to $9.06
billion, as high iron-ore prices and China's economic recovery
helped to cushion weaker demand in countries where the coronavirus
crisis has deepened. Still, BHP missed the $9.33 billion median
forecast of eleven analysts compiled by FactSet.
Directors declared a final dividend of $0.55 a share, taking
full-year ordinary dividends to $1.20 a share. While that exceeded
a policy goal of paying out 50% of earnings to shareholders as
dividends, the annual payout was 10% lower than 12 months
earlier.
Global miners that rely on iron ore as an engine for their
earnings are faring better than rivals focused on digging up other
commodities during the pandemic. Rio Tinto PLC, BHP's main rival in
Australian iron-ore production, this month lifted its midyear
dividend. In contrast, Glencore PLC reported a first-half loss and
scrapped its dividend as the pandemic sapped demand for commodities
ranging from coal to zinc.
Iron ore is a key ingredient in steel making, which China
dominates. Economists view steel as a proxy for China's economy
because around 90% of output is used locally.
China's economy expanded by 3.2% in the second quarter, faster
than expected by economists, after Beijing countered the effect of
the pandemic with stimulus measures targeted at infrastructure and
construction projects, which require a lot of steel. Iron-ore
prices have also been fanned by supply disruptions in Brazil where
some mines had to operate at reduced rates or shutter temporarily
due to the spread of the coronavirus.
However, recent data have suggested to some economists that
China's rebound may have already seen its best days. China's retail
sales, a closely watched gauge of consumption, were in negative
territory in July when market expectations had been for growth.
The iron-ore price reached $121.75 a metric ton on Friday, close
to a six-and-a-half year high, according to S&P Global Platts
data. However, many resources analysts think the price could soon
peak as China is entering a seasonally weak period of construction,
which may restrain demand for iron ore, while supply from Brazil is
recovering.
BHP is assuming most major economies will likely suffer deep
recessions this year, with the exception of China.
"Recovery will vary considerably by country," said Chief
Executive Mike Henry. "Our diversified portfolio and high-quality
assets position us to continue to generate returns in the face of
near-term uncertainty."
Many resources companies have responded to the impact of the
pandemic by shrinking their portfolios to focus on assets that make
bigger profit margins and are considered to be less risky.
On Tuesday, BHP said it wanted to concentrate its coal portfolio
on higher-quality coking coals, which are used to make steel. That
strategic move means the company is looking at ways to exit from
its BMC joint venture with Japan's Mitsui & Co., which produces
metallurgical coal at two mines in eastern Australia. BHP said it
also wants to exit from its New South Wales Energy Coal business in
Australia and the Cerrejon thermal coal mine in Colombia.
BHP's thermal coal operations have been a focus for
environmental activists and investors worried about the miner's
contribution to climate change. Rio Tinto sold its coal assets in
2018.
Mr. Henry said BHP would also look to sell oil and gas assets
"that are mature or which are likely to realize greater value under
different ownership."
"This approach to actively managing our portfolio for value,
risk and returns over multiple time horizons will yield superior
returns for our investors," he added.
BHP's net debt rose to $12.04 billion at the end of June, at the
bottom end of the company's stated $12 billion-$17 billion target
range. Its net debt stood at $9.45 billion a year earlier.
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
August 17, 2020 20:09 ET (00:09 GMT)
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