Nickel takes shine off BHP strength in iron ore, copper
BHP has posted a sharply lower net profit on charges for loss-making nickel and a deadly dam disaster, offset by strength in iron ore and copper.
Photo: Jim Plouffe
Net profit for the six months to December 31 fell 86 per cent to $US927 million after the resources giant wrote off the value of Western Australian nickel operations and booked a charge for a past dam disaster in Brazil.
The underlying attributable profit was $US6.6 billion, in line with a year earlier, even as the iron ore and copper giant demands taxpayer support for the nickel division.
Underlying earnings before interest, taxes, depreciation, and amortisation, a key measure of profitability, rose five per cent to $US13.875 billion.
Revenue rose six per cent to $US27.23 billion but profit from operations fell 56 per cent to $US4.8 billion.
Adjustments for Nickel West, West Musgrave and Samarco offset an otherwise solid operational performance and overall healthy commodity prices in a period, CEO Mike Henry said.
He said the mining industry is facing “near-term headwinds” in developing resources in Australia, with the labour market the core inflationary concern.
“It’s essential that the right industrial relations and fiscal settings are in place to support the sector’s ability to compete and win in global markets,” he said.
BHP said it continued to assess the impact of the federal government’s “same job, same pay” changes that would add to the company’s labour costs.
“Longer-term the mega-trends playing out in the world around us continue to underline our confidence in future demand for steel, non-ferrous metals and fertilisers, Henry said.
In the near term, BHP said the global economic outlook was expected to improve “modestly” with “the worst of the general inflationary wave behind us”, which would have a positive impact on the industry for the rest of 2024.
BHP reiterated it was possibly entering into a period of care and maintenance for Nickel West and assessing the development of the West Musgrave project acquired from OZ Minerals.
Events in the Red Sea are not expected to alter the overall downward trend in global inflation and have not had any material impact on the business, BHP said.
BHP declared a fully franked interim dividend of US 72 cents, down from US 90 cents a year earlier.
– AAP
