In This Article:
By Sameer Manekar and Melanie Burton
(Reuters) -BHP sees signs of economic recovery in China and central bank rate cuts reviving demand for steel and copper but flagged risks to global growth from potential trade tensions, as it logged its lowest first-half profit in six years.
After scrapping a $49 billion bid to acquire Anglo American, which last year rebuffed its bigger rival's effort to snare control of prized copper assets in Latin America, BHP CEO Mike Henry said the company was not looking at acquisitions now.
"Our current focus is 100% on organic growth options," Henry told reporters.
The world's largest listed miner on Tuesday reported an underlying attributable profit of $5.08 billion for the six months ending December 2024, down 23% from a year earlier but slightly ahead of the Visible Alpha consensus estimate of $5.01 billion.
It declared an interim dividend of 50 cents per share, its lowest since 2017, down from 72 cents per share a year earlier but in line with consensus at the bottom end of the miner's payout policy.
BHP warned its full-year iron ore production from Western Australia operations would no longer be in the upper half of the expected range of between 282 million and 294 million metric tons due to the impact of Tropical Cyclone Zelia which hit the Pilbara region earlier this month.
Underlying operating earnings from iron ore, its biggest profit-generating commodity, declined 26% to $7.2 billion as the average realised price fell to $81.11 per wet metric ton from $103.7 a year ago.
However, the miner pointed to global monetary easing potentially reviving demand prospects for its two main products, steel ingredient iron ore, and copper, which has grown to account for nearly half of its profits.
"Central banks' ongoing rate cuts are expected to translate into a recovery for steel and copper demand across the OECD (Organisation for Economic Co-operation and Development) in the near term," it said.
"However, potential trade tensions present a risk to the recovery in developed economies and across the globe."
Demand for BHP products remained strong despite global economic and trade uncertainties, with early signs of recovery in China, resilient economic performance in the U.S. and strong growth in India, Chief Executive Officer Mike Henry said.
BHP's copper operations earned $5 billion over the first half, growing by 44% as tight fundamentals, Chinese stimulus plans and interest rate cuts in the United States kept copper prices elevated.
It expects to spend $4.7 billion in fiscal 2025 on expanding its copper operations.
(Reporting by Sameer Manekar Rishav Chatterjee in Bengaluru, Melanie Burton in Melbourne; Editing by Lisa Shumaker and Sonali Paul)