BHP's annual profit rises sharply amid rising commodity prices

BHP's net income for the fiscal year ended June 30 was $30.9 billion, up 173% from $11.3 billion a year earlier.

The Group posted a record underlying attributable income of $23.8 billion, up 39% year-on-year for total operations.

The group's capital expenditure and exploration costs were US$6.1 billion for ongoing operations. These expenses are expected to be approximately $7.6 billion and $9 billion, respectively, in fiscal 2023 and 2024.

BHP Chief Executive Mike Henry says the strong performance was driven by safe and sound operations, project execution and capital management discipline, which enabled the group to profit from high commodity prices.

BHP remains the world's cheapest iron ore producer and has achieved record annual sales of Western Australian iron ore, he said.

Henry also says South Flank's full capacity is ahead of schedule and the group has revised its medium-term production forecast to over 300 million tons per year.

“In FY 2023, we are evaluating expansion options to bring production up to 330 Mtpa,” he adds.

Meanwhile, he expects China to become a source of stable demand for commodities in the coming year, and political support will gradually increase.

At the same time, he expects to see a slowdown in advanced economies as monetary policy tightens, as well as ongoing geopolitical uncertainty and inflationary pressures.

According to him, the direct and indirect impact of the energy crisis in Europe is of particular concern.

“Tight labor markets will continue to be a challenge for global and local supply chains. Waves of Covid-19 infections continue to occur in the communities where we operate and we plan accordingly,” he says.