BHP has posted a “huge” full-year result and record dividend on surging commodity prices, record iron ore sales from its Western Australian operations, and discipline on costs.
Chief Executive Mike Henry told reporters on Tuesday it had been a “record” year for BHP – record underlying earnings, record free cashflow and a record return of dividends to shareholders.
The resources giant reported an underlying profit from continuing operations for the year to June 2022 of $US21.3 billion ($A30.3 billion), up 26 per cent.
Underlying earnings for the year were up 16 per cent to $US40.6 billion ($57.8 billion).
That enabled the global miner to declare a fully franked final dividend of $US1.75 ($2.49) a share, taking total dividend for the full year to a record $US3.25 per share.
Analyst Tony Sycamore at StoneX Financial said the FY22 results for BHP were a “huge beat” compared to market expectations.
“BHP’s share price is trading five per cent higher at $40.94 and if confirmed on a closing basis the move above $40.00 looks significant,” he tweeted.
Analysts also expect a sweetened offer for Adelaide-based OZ Minerals after BHP’s recent $8.4 billion opening bid was rebuffed.
But BHP is holding firm for now on the offer it says is “compelling”.
Mr Henry said it was disappointing that OZ Minerals had rejected the offer, which was “very fair and full value”.
The OZ Minerals board has said BHP’s “highly opportunistic” offer of $25 per share significantly undervalued the copper and nickel company.
OZ Minerals’ copper mines in SA’s Gawler Craton alongside BHP’s Olympic Dam – a global hotspot for iron oxide copper-gold – could be combined to create a top tier asset for the global conglomerate.
And the miner’s nickel assets could feed BHP’s Western Australian smelters and refineries.
Asked about a higher bid, Mr Henry said BHP would remain “absolutely disciplined” on capital allocation.
“We have a very clear eye on value. I’m optimistic about the future of Olympic Dam even without an Oz Minerals bid,” he said.
Shares in Oz Minerals were up 23 cents or 0.9 per cent at $25.92.
Looking ahead, Mr Henry said tight labour markets will remain a challenge, globally and in Australia, and COVID-19 was an ongoing challenge.
But at Western Australia Iron Ore (WAIO), the ramp-up of South Flank is ahead of schedule and could be expanded further.
“In the 2023 financial year, we are assessing expansion alternatives to take us toward 330 Mtpa (million tonnes per annum) of production,” Mr Henry said.
BHP said it remains the lowest cost iron ore producer globally, and delivered record sales from WAIO for the third consecutive year.
Overall, the operating environment is expected to remain volatile in the near term with the energy crisis in Europe a particular concern.
But the BHP boss expected China to emerge as a source of stability for commodity demand in the year ahead.
“As China comes out of its COVID lockdown, we see that as a tailwind for global growth,” Mr Henry said.
BHP had earlier paid an in-specie dividend of $US3.83 for each BHP share held following the merger of its petroleum division with energy giant Woodside, taking the total payout to shareholders for the year to about $US36 billion.
Amid calls for big firms to pay more tax, BHP said it also paid US$17.3 billion in tax, royalty and other payments to governments in the 2022 financial year.