BHP reports flat first-half profit; warns of inflation, high interest rates impact

BHP Group said on Tuesday its first-half underlying profit was largely unchanged from a year ago, citing strong revenue generation, but warned of higher costs from the lagged effect of global inflation persisting into the second-half.

The world’s largest listed miner also warned the lag effect of higher interest rates will impact household consumption in the developed world in the first half of calendar 2024, but predicted strong commodity demand in China and India.

BHP remained cautious on top commodity consumer China until it became clearer as to how effective its stimulus policies push will be, while noting a “more balanced” demand picture in India which has shown “continued healthy momentum.”

“We expect the lagged impacts from the inflation peak observed in FY23, as well as continued labour market tightness, to impact our cost base throughout the remainder of FY24,” the miner said.

However, it predicted a “more balanced global economy and evidence that the worst of the general inflationary wave is behind us, will have a positive impact on our industry in calendar year 2024.”

For the first-half, BHP’s strong revenue growth of 6 per cent was underpinned by higher iron ore and copper prices and contributions from new projects, but was partially offset by lower energy coal realised prices.

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The world’s biggest listed miner said underlying profit attributable to shareholders was US$6.60 billion for the six months ended Dec 31, unchanged from the previous year, but beat an LSEG estimate of US$6.42 billion.

It declared an interim dividend of US$0.72 per share, compared with US$0.90 per share declared a year earlier. REUTERS