BHP records 37% drop in profit despite “strong” financials

Despite recording “strong” financial results, the ASX’s largest tock BHP (ASX:BHP) tabled underlying attributable profit of US$13.4b (A$20.9b) for FY23, down 37% from FY22.

Revenue was down 17% from FY22 to US$53.8b (A$83.9b) while attributable profit — total operations decreased 58% to US$12.9b (A$20.1b).

BHP credits these decreases due to lower prices across iron ore, metallurgical coal and copper.

Chief executive Mike Henry commented on the company’s performance.

“Our financial results for the year were strong, underpinned by reliable production together with capital and cost discipline as we managed lower commodity prices and inflationary pressures,” he said.

“Our balance sheet is robust and deliberately positioned to support portfolio growth in commodities the world needs for population growth, urbanisation and decarbonisation.”

While demand for commodities in the developed world has slowed substantially due to the impact of anti-inflationary policies and the energy crisis, demand has remained relatively robust in China and India.

Copper production jumped 9% to 1717kt, iron ore production saw a slight 1% increase to 257Mt, and nickel saw a 4% increase in production to 80kt, while metallurgical coal production remained the same at 29Mt.

Notably, record production was achieved at Western Australia Iron Ore, Spence and Olympic Dam.

“Commodity demand has remained relatively robust in China and India even as developed world economies have slow substantially,” Mr Henry said.

“In the near term, China’s trajectory is contingent on the effectiveness of recent policy measures. We expect buoyant growth in India with strong construction activity underpinning an expansion in steelmaking capacity.

“More broadly, there is increased recognition of the importance of critical minerals and strategies across the globe to incentivise investment in supply and demand, which provides opportunities and challenges.”

Following the acquisition of OZ Minerals during the year, BHP is focusing on creating a new copper province in South Australia.