BHP attributable profits soared 173% in the year ending June 2022 as rising commodity prices and a bounce back from the pandemic spurred demand.
BHP follows in the footsteps of other major diversified miners in producing record profits in 2022. BHP’s strength in iron ore, copper and coal helped theme to produce a record $40.6 billion EBITDA.
BHP bumper profits have meant significant payouts for investors as the miner announced cash dividends of US$3.25 per share, equivalent to a 77% payout ratio.
BHP shares surged on the news, gaining over 4% at the time of wiring on Tuesday morning.
Chinese stability
Not only did BHP impress markets with their 2021 performance, they provided reassuring comments on the outlook for Chinese demand for their metals.
The BHP CEO said they saw China as a source of commodities ‘stability’ through to 2023 which is at odds with recent investor concerns about the health of the Chinese economy after a series of lockdowns.
“Despite China’s fragility, commodity giant BHP Billiton sees it as the more reliable source of revenue ahead, while other advanced economies face more of a struggle amid rising inflationary pressures,” said Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown.
“BHP’s pre-tax annual profits tripled mainly due to soaring coal and copper prices over the year. But weaker commodity prices especially for industrial metals remain a risk for the miner ahead especially given worries about China’s property sector, although it’s strong cost control and low cost operations should give it resilience amid the uncertainty.’’