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BHP says its FY2022 profit from operations up 34% to $34.1 billion

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(Kitco News) - BHP announced today that for the year ended 30 June 2022 (FY2022), its profit from operations was US$34.1 billion, up 34% from the prior year, while underlying EBITDA was a record US$40.6 billion at a record margin of 65% for continuing operations.

The company said that profit from continuing operations of US$34.1 billion (2021: US$25.5 billion) increased as a result of higher coal and copper prices, strong underlying operational performance, including record sales at WAIO and near-record concentrator throughput at Escondida, disciplined cost control supported by cost reduction initiatives across our assets and favourable exchange rate movements.

This was partially offset by COVID-19 restrictions and supply constraints, lower copper grades at Escondida, higher diesel, electricity and consumable prices, significant wet weather at BMA and the impacts from maintenance, including the planned major smelter maintenance campaign at Olympic Dam and unplanned smelter outage at Nickel West.

The company also reported FY2022 attributable profit of US$30.9 billion and a record underlying attributable profit of US$23.8 billion, up 39% from the prior year for total operations.

According to a press-release, FY2022 attributable profit of US$30.9 billion includes an exceptional gain of US$7.1 billion (2021: US$11.3 billion, which includes an exceptional loss of US$5.8 billion), primarily reflecting a net gain on merger of BHP’s Petroleum business with Woodside.

Importantly, BHP said that its Board has determined to pay a final dividend of US$1.75 per share or US$8.9 billion, which includes an additional amount of US$0.60 per share (equivalent to US$3.0 billion) above the 50% minimum payout policy. Total cash dividends announced of US$3.25 per share, equivalent to a 77% payout ratio.

CEO Mike Henry commented, “BHP delivered strong operational performance and disciplined cost control to realise record underlying earnings of US$40.6 billion and record free cash flow of US$24.3 billion. We have reduced debt and announced a final dividend of US$1.75 per share, bringing total cash dividends announced for the full year to a record US$3.25 per share.

"These strong results were due to safe and reliable operations, project delivery and capital discipline, which allowed us to capture the value of strong commodity prices. BHP remains the lowest cost iron ore producer globally and we delivered record annual sales from Western Australia Iron Ore. BHP enters the 2023 financial year in great shape strategically, operationally and financially, and well prepared to manage an uncertain near-term environment."

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