BHP’s profit rises 2% as concerns on China demand increase
BHP Group, the world’s biggest miner, reported full-year profit edged up 2%, in line with analyst forecasts, even as China’s property market continued to weigh on its economy and demand for iron-ore.
Underlying attributable profit was $13.66-billion for the 12 months ended June 30, the Melbourne-based company said in filings on Tuesday.
“In the near term, we expect volatility in global commodity markets, with China experiencing an uneven recovery,” BHP CEO Mike Henry said in the statement. “We anticipate developed economies will face gradual relief from the lingering effects of higher interest rates in coming years.”
As China’s economy slows and with its property market languishing, demand for some of BHP’s biggest revenue earners — especially iron ore — is cooling. Major growth opportunities may be limited, with the company’s failed $49 billion bid to capture Anglo American this year dealing a blow to Henry’s plans to quickly expand its portfolio of materials tied to renewables and electrification, specifically copper.
The world’s largest miners have remained profitable despite concerns over sluggish growth in China, which has weighed on iron ore prices this year.
Last month, BHP’s biggest rival Rio Tinto Group reported first-half profit edged higher from the year before — although it narrowly missed estimates. Meanwhile, Vale — the world’s second-biggest iron ore supplier — posted second-quarter results that slightly trailed analyst estimates after facing higher expenses.
BHP’s attributable profit compared with an analysts’ estimate of $13.49-billion. It will pay a final dividend of 74 cents per share, compared with 80 cents a year ago.
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