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Highlights
- BHP's H1 FY24 revenue rose 5.9%, driven by higher copper production and commodity prices.
- BHP and Lundin Mining to acquire Filo Corp. for USD 2.1 billion, focusing on copper.
- The company’s FY24 production guidance includes copper of 1,720-1,910 kt, iron ore of 254-264.5Mt, and Nickel of 77-87kt.
BHP Group Ltd (LSE:BHP) is a resource company based in Australia. It produces commodities, including copper, iron ore, potash, nickel, and metallurgical (steelmaking) coal. It is listed on the FTSE index.
In H1 FY24, the company’s revenue increased by approximately 5.9%, driven by higher copper production and rising average realized prices for various commodities. Underlying EBITDA also rose by about 4.9%, reflecting a significant improvement from the previous year, with profits from operations reaching USD 6,430 million compared to a loss in H1 FY23.
Further, in the half-year period, BHP had a higher EBITDA margin of 61.5% and a higher quick ratio of 1.22x, compared to the industry averages of 33.0% and 1.19x, respectively.
The company’s management declared an interim dividend of USD0.72 per share, totaling USD3.6 billion. This amount corresponds to about 56% of the payout ratio and was distributed on March 28, 2024. Based on the stock's closing price on August 13, 2024, this dividend results in an annualised yield of approximately 8.27%.
Recent Business Update
In July, the company revealed that BHP and Lundin Mining Corporation will jointly acquire 100% of Filo Corp. Filo Corp. is the owner of the Filo del Sol copper project. BHP's total cash payment for this acquisition is expected to be around USD 2.1 billion. This move aligns with BHP's strategy to target promising early-stage copper projects and establish strategic partnerships to enhance long-term economic and social value.
Company outlook
The company has provided production guidance for FY24, forecasting copper production to be between 1,720 and 1,910kt. Iron ore production is expected to range from 254 to 264.5Mt. Nickel production is forecasted to be between 77 and 87kt, while metallurgical coal output is estimated to vary from 21.5 to 22.5Mt.
Top 10 Shareholders
The top 10 shareholders of BHP collectively account for approximately 24.99% of the total shares. The Vanguard Group, Inc. is the largest shareholder, holding around 5.49% of the shares, followed by State Street Global Advisors Australia Ltd., which holds about 3.97%. This distribution is illustrated in the chart below:
Stock performance
BHP's stock price has declined approximately 15.84% over the past three months and around 13.79% over the last six months. The stock's 52-week range is between GBX 1,997.00 and GBX 2,722.00, with the current trading price falling below the average of this 52-week high and low.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 16 August 2024. The reference data in this report has been partly sourced from EODHD/Others.
