*
H1 profit misses estimate
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Interim dividend beats estimate
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Positive on demand outlook from China
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Starts process to sell two Queensland met coal mines
(Updates with cost of mining production, sale process of two
coal mines, analyst comment)
By Sameer Manekar and Melanie Burton
Feb 21 (Reuters) - Global miner BHP Group was
positive about demand outlook through to fiscal 2024 as top
metals consumer China reopens and shifts policy towards its
debt-laden property sector, the company said on Tuesday after
its 2023 first-half profit missed estimates.
However, its interim dividend of 90 cents per share, while
lower than last year's $1.50 per share, beat Vuma Financial's
estimate of 88 cents.
"We are positive about the demand outlook in the second half
of fiscal 2023 and into fiscal 2024, with strengthening activity
in China on the back of recent policy decisions the major
driver," Chief Executive Officer Mike Henry said.
"We expect domestic demand in China and India to provide
stabilising counterweights to the ongoing slowdown in global
trade and in the economies of the U.S., Japan and Europe," he
said in a statement.
Last year, miners wrestled with surging costs, a tight
domestic labour market and lower iron ore prices due to China's
strict zero-COVID policy. But the reopening of the world's
second-biggest economy and a property sector policy shift has
BHP upbeat on the commodity demand outlook.
"The long-term outlook for our commodities remains strong
given population growth, rising living standards and the metals
intensity of the energy transition, including for steelmaking
raw materials," Henry added, apparently referring to metals
demand for products like electric vehicles and windmills.
However, in an environment where central banks are
aggressively tightening their monetary policy, BHP expects its
operating environment to remain volatile in the near term, but
expects China to be a source of stability for commodity demand.
For six months ended Dec. 31, the world's largest listed
miner said underlying profit attributable to continuing
operations was $6.6 billion, compared with $9.72 billion a year
earlier. That missed a Vuma Financial estimate of $6.82 billion.
"There was nothing in that we didn’t expect to see," said
analyst David Lennox of Fat Prophets in Sydney, adding
shareholders would find comfort in a slightly
better-than-expected dividend payout.
"We have got BHP as a hold primarily because their share
price is sitting up at record highs and they are going to have
to do pretty well to justify those levels."
The Melbourne-based miner also warned it now expects the
marginal cost of mining production to be markedly higher than
prior to the COVID-19 pandemic.
BHP, along with joint venture partner Mitsubishi Development, has started pursuing options to divest Daunia and Blackwater coal mines, two of nine metallurgical coal mines in Queensland's Bowen Basin. (Reporting by Sameer Manekar and Himanshi Akhand in Bengaluru, and Melanie Burton in Melbourne; Editing by Jonathan Oatis and Josie Kao)
Himanshi.Akhand@thomsonreuters.com;))