BHP Group (BHP) SNAPSHOT
Profile: BHP Group (BHP) is one of the world’s largest resources companies and has its headquarters located in Melbourne, Australia. BHP extracts and processes minerals, oil and gas. Its products include iron ore, copper, metallurgical coal, energy coal, oil, gas, silver, lead, zinc, molybdenum, uranium and gold.
History: BHP was formed through the merger of Broken Hill Proprietary Company Limited and Billiton Plc in 2001. Billiton was established in 1860 and Broken Hill Proprietary Company Limited was incorporated in 1885. In 2015, BHP demerged with South32 Ltd and divested its ‘non-core’ manganese, silver and nickel assets. BHP completed the sale of its Fayetteville Onshore US assets to Merit for US$0.3bn in September 2018 and its interest in the Eagle Ford, Haynesville and Permian Onshore US oil and gas assets to BP for US$10.5bn in October 2018.
Earnings composition: US$11.1bn (48%) of BHP’s FY19 underlying EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) was reported by the Iron Ore segment. Copper contributed US$4.6bn (19%), Coal US$4.1bn (17%) and the Petroleum segment (continuing operations) $US3.8bn (16%).
Most recent result – 1H20: BHP reported US$12.1bn in underlying EBITDA, up 15% on the prior corresponding period (pcp). The increase was driven by favourable impacts from higher average realised iron ore and copper prices, partially offset by lower petroleum, metallurgical and thermal coal prices. The result also benefited from a weakening AUD and CLP relative to the USD as well as a US$393m impact from the new IFRS 16 Leases accounting standard. These impacts were partially offset by lower volumes as a result of planned maintenance, petroleum natural field decline and copper grade decline. Underlying attributable NPAT from continuing operations was up 29% on the pcp to US$5.2bn. A dividend of US$0.65 (AU$0.99) was declared, up from US$0.55 in the pcp.
Company outlook: In FY20, BHP expects 242-253Mt (million tonnes) of iron ore production, 110-116MMboe (million barrels of oil equivalent) of petroleum production, copper production of 1.705-1.820Mt, metallurgical coal production of 41-45Mt and energy coal production of 24-26Mt.
Important dates: Ex-dividend date was 5 March 2020. Payment date is 24 March 2020. 3Q20 results are scheduled for 21 April 2020. 4Q20 results are scheduled for 21 July 2020. FY20 results are scheduled for 18 August 2020.
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