Feb 17 (Reuters) – BHP Group reported a stronger-than-expected half-year underlying profit on Tuesday, driven by copper, which for the first time surpassed iron ore to contribute more than half of the miner’s earnings.
The world’s largest listed miner reported first-half underlying attributable profit of $6.20 billion, up 22% from a year earlier and ahead of the Visible Alpha consensus of $6.03 billion.
BHP declared an interim dividend of 73 cents per share, also ahead of the market estimates of 63 cents, and representing a payout ratio of 60%.
Copper, including byproducts, contributed $7.95 billion to BHP’s operating earnings in the six months ending December 31, a shade higher than iron ore’s $7.50 billion, and making up 51% of the group’s total underlying operating earnings of $15.46 billion.
That was largely driven by a 32% jump in realised prices for copper. A record first-half iron ore production alongside higher prices also boosted the miner’s profits to be the highest in three years.
BHP produced a record 146.6 million metric tons of iron ore from its Western Australia operations on a 100% basis, and received 4% higher prices for its commodity. However, it flagged a 7% growth in its unit costs, driven largely by record output.
Separately, the miner also announced a silver streaming agreement with Wheaton Precious Metals for an upfront payment of $4.3 billion at completion, to deliver silver from its share of output at Peru’s Antamina mine.
In December last year, BHP said BlackRock-owned Global Infrastructure Partners (GIP) would invest $2 billion in Western Australia Iron Ore’s (WAIO) inland power network for a minority stake.
“Together, these agreements will unlock over $6 billion of cash. We see the potential to unlock up to a total of $10 billion,” CEO Mike Henry said.
(Reporting by Sameer Manekar and Rajasik Mukherjee in Bengaluru; Editing by Lisa Shumaker and Sonali Paul)
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