BHP Group Ltd., Melbourne, posted its highest ever full-year profit on record commodity prices, and will push ahead with growth options on a stronger demand outlook in China.
CEO Mike Henry said China’s emergence from the COVID-19 lockdowns would provide a “tailwind” to the global economy, in a counterpoint to jittery sentiment on China following a swath of surprisingly weak data.
“We think that over the next 6-12 months, China, if anything, is going to provide some stability to global growth and will help offset some of the slowing that we see elsewhere,” Henry said. China typically accounts for more than 60% of BHP’s revenue.
BHP’s result was “better than expected,” Goldman Sachs Group Inc. analysts Paul Young and Hugo Nicolaci wrote in a note, cited by Bloomberg. But they warned that stronger currencies and weaker commodity prices were key downside risks, particularly if China’s property sector does not recover in the next year.
Rival miners have cautioned over a weaker outlook, and Rio Tinto Group last month reported a decline in first-half profits and halved its dividend. Gold giant Newmont Mining Corp. and copper producer First Quantum Minerals Ltd. have also warned investors in recent weeks on the impact of inflationary pressures.
BHP, which is developing the Jansen potash project in Saskatchewan (see related story), reported profit from operations of $34.10 billion on revenue of $65.1 billion for the year ending June 30, 2022, up from the year-ago $25.5 billion and $56.92 billion, respectively. EBITDA moved up to $40.63 billion from $35.07 billion.