TOL - 22nd Feb, 2024
An insider's guide to BHP's future growth plans: Potash in, Nickel out
In this interview, Livewire speaks with BHP Group CFO David Lamont for an inside look at the Big Australian's latest half-year result.
BHP Group released its first-half results on Tuesday, with the mining giant's share price falling 4% on the back of an 86% profit plunge.
Net profits were impacted by two "exceptional items" - one, relating to BHP's Nickel West business - which lost around US$173 million on the EBITDA line on the back of supply growth out of Indonesia, and the other, an impairment relating to its settlement from the Samarco Dam failure in Brazil.
But as BHP Group Chief Financial Officer David Lamont told Livewire on Tuesday, operational performance remains strong.
As Lamont explains, BHP Group's two main commodities - Iron Ore and Copper - saw price rises of around 21% and 5% respectively, contributing to strong operating cashflows and helping BHP beat estimates. It also declared a US$0.72/share interim dividend.
In this interview, Lamont maintains BHP's commitment to a 50% minimum payout ratio and outlines why he believes iron ore prices are sustainable at these levels - despite a shortfall in demand for Chinese real estate.
He also provides his outlook for BHP's Nickel, Copper and Potash businesses, shares why BHP will never have Lithium assets in the portfolio and outlines which segments are the most exciting growth opportunities for the Big Australian over the coming few years.
Note: This interview was recorded on Tuesday 20 February 2024.
Timecodes:
- 0:00 - Intro
- 0:27 - Key figures from BHP's latest result
- 1:35 - Impact of "exceptional items" on BHP's H1 earnings
- 3:06 - Good news for dividend lovers: BHP committed to a 50% payout ratio
- 4:23 - Iron Ore to contribute to the lion's share of BHP's earnings in H2
- 5:24 - Sustainability of iron ore prices at current levels
- 6:17 - China's impact on BHP's earnings
- 7:34 - Nickel assets writedown and the outlook for Nickel prices from here
- 9:23 - Where BHP is investing for growth: Copper and Potash
- 10:53 - BHP focused on operational performance and early-stage opportunities
- 12:44 - Potash business in Canada a "really good growth avenue"
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
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Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
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