UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

February 20, 2024

 

 

BHP GROUP LIMITED

(ABN 49 004 028 077)

(Exact name of Registrant as specified in its charter)

VICTORIA, AUSTRALIA

(Jurisdiction of incorporation or organisation)

171 COLLINS STREET, MELBOURNE,

VICTORIA 3000 AUSTRALIA

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

☒ Form 20-F ☐ Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: ☐ Yes ☒ No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a

 

 

 

20 February 2024

Results for announcement to the market

Name of Company:      BHP Group Limited (ABN 49 004 028 077)

Report for the half year ended 31 December 2023

This statement includes the consolidated results of BHP for the half year ended 31 December 2023 compared with the half year ended 31 December 2022.

This page and the following 68 pages comprise the half year end information given to the ASX under Listing Rule 4.2A and should be read in conjunction with the 2023 BHP Group annual financial report.

The results are prepared in accordance with IFRS and are presented in US dollars.

 

														US$ Million
Revenue			Up				6	%			to				27,232
Profit after taxation attributable to the members of the BHP Group			Down				86	%			to				927

Net Tangible Asset Backing:

Net tangible assets¹ per fully paid share were US$8.68 as at 31 December 2023, compared with US$8.91 as at 31 December 2022.

 

1	Net Tangible Assets includes right of use assets with a carrying value of US$3,194 million as at 31 December 2023 (December 2022: US$2,466 million).

Dividends per share:

 

Interim dividend for current period		US 72 cents fully franked
(record date 8 March 2024; payment date 28 March 2024)
Interim dividend for previous corresponding period		US 90 cents fully franked

Dividend Reinvestment Plan

Any eligible shareholder who wishes to participate in the dividend reinvestment plan, or to vary a participation election, should do so by 5 March 2024 or, in the case of shareholdings on the South African branch register of BHP Group Limited, in accordance with the instructions of your CSDP or broker. Full terms and conditions of the dividend reinvestment plan and details about how to participate can be found at: bhp.com

This statement was approved by the Board of Directors.

/s/ Stefanie Wilkinson

Stefanie Wilkinson

Group Company Secretary

BHP Group Limited

20 February 2024

Financial results for the half year ended 31 December 2023

Strong underlying financial performance underpinned by reliable operations and disciplined cost control.

We are saddened by the loss of one of our sub-contractors who was fatally injured at BMA’s Saraji mine in January. An investigation is underway into the circumstances of this tragic incident and we are resolute in our commitment to prevent fatalities and serious injuries in our workplace.

Today, we announced underlying attributable profit of US$6.6 billion for the half year. We also announced an interim dividend of 72 US cents per share – a total of US$3.6 billion, equating to a payout ratio of 56%.

The period also had its challenges, with adjustments relating to Nickel West, West Musgrave and Samarco offsetting an otherwise solid operational performance and overall healthy commodity prices.

At our Western Australia Iron Ore operations, we remain the lowest cost major producer globally and in copper we set new production records at our operations in South Australia and Chile. In South Australia, our consolidated copper province has performed strongly and we are pursuing future growth options. In Canada, we’ve sanctioned Jansen Stage 2, which will almost double our planned potash production capacity.

We’ve seen volatility in global commodity prices and demand in the developed world has been softer than expected. That said, China demand is healthy despite weakness in housing and India remains a bright spot. In Australia, the mining industry is facing near-term headwinds in developing resources and it’s essential that the right industrial relations and fiscal settings are in place to support the sector’s ability to compete and win in global markets.

Long term, the mega-trends playing out in the world around us continue to underline our confidence in future demand for steel, non-ferrous metals and fertilisers.

 

		Mike Henry BHP Chief Executive Officer
Safety		Social value
Fatality at BMA		Female employee representationi
		36.2% h2.6% pts
		HY23 33.6%
A team member from one of BHP Mitsubishi Alliance (BMA)’s sub- contracting partners was fatally injured in an incident at BMA’s Saraji mine in January. Investigations into the incident are underway.		We have more than doubled our female employee representation since announcing in 2016 our aspiration to achieve a gender-balanced workforce, and more than 30% of our people leaders are female.
Financial performance
Underlying attributable profitii		Attributable profit
US$6.6 bn		US$0.9 bn i86%
HY23 US$6.6 bn		HY23 US$6.5 bn
Our underlying attributable profit was in line with HY23, as a result of strong revenue generation and disciplined cost control. All assets are on track to meet their FY24 production and unit cost guidance. FY24 production and unit cost guidance for BMA was revised at the Q2 Operational Review.		Our attributable profit decreased as a result of an exceptional loss of US$5.6 bn following an impairment of Western Australia Nickel, and an increase to the provision related to the Samarco dam failure.
Capital management
Capital and exploration expenditureii		Fully franked interim dividend
US$4.7 bn h57%		US$0.72 per share
HY23 US$3.0 bn		56% payout ratio
We are investing in growth and increased our capital and exploration spend by 57% including at Jansen and Copper South Australia.		We have determined an interim dividend of US$3.6 bn. This follows our strong returns to shareholders in CY23, when we were the highest dividend payer on the ASX.

 

1

BHP | Financial results for the half year ended 31 December 2023

 

 

Group financial performance

Earnings and margins

Solid operational performance and disciplined cost control, aided by higher iron ore and copper prices in the period, maintains strong underlying financials.

 

Revenue   US$27.2 bn h6%   HY23 US$25.7 bn   Attributable profit   US$0.9 bn i86%   HY23 US$6.5 bn   Underlying attributable profit   US$6.6 bn   HY23 US$6.6 bn   Profit from operations   US$4.8 bn i56%   HY23 US$10.8 bn   Underlying EBITDAii   US$13.9 bn h5%   HY23 US$13.2 bn   Underlying EBITDA marginii   53.3%   HY23 53.5%   Adjusted effective tax rateii   31.0%   HY23 29.5%   FY24e 30 – 35%		BHP’s revenue increased by US$1.5 bn primarily as a result of higher iron ore and copper prices, as well as the contribution of new mines Prominent Hill and Carrapateena. These were partially offset by New South Wales Energy Coal (NSWEC), where despite a 43% increase in sales volumes, realised prices decreased by 65%.   We continue to experience the impacts of inflation on our underlying cost base, particularly on labour and parts, as reflected in a global inflation rate of 6.3% across our operating jurisdictions during CY23.   Unit costsii were however approximately 5.4%iii higher across our major assets during HY24 reflecting our disciplined cost and reliable operational performance and the normalisation of commodity linked consumable prices such as diesel and acid.   This strong operational performance saw Western Australia Iron Ore (WAIO) maintain its lead as the lowest cost major iron ore producer globally and overall Group Underlying EBITDA increase by 5%, with an Underlying EBITDA margin of 53.3%.   For further details see Underlying EBITDA waterfall.   We expect the lagged impact of global inflation to continue into H2, particularly in relation to labour, and as we negotiate long-term supply arrangements.   We continue to assess the impact of the Australian Federal Government’s ‘Same Job Same Pay’ industrial relations reforms which will add to our labour costs.		Underlying attributable profit was in line with the prior period, however we reported an exceptional loss, which decreased attributable profit by US$5.6 bn, due to:   •  a US$2.5 bn impairment of Western Australia Nickel; and   •  a US$3.2 bn charge related to the Samarco dam failure.   For further details see note 2 – Exceptional items and note 9 – Significant events –Samarco dam failure.   Our adjusted effective tax rate of 31% was above the 30% Australian corporate tax rate. The adjusted effective tax rate for FY24 is still expected to be in the range of 30 to 35%.   Our operating costs include US$1.8 bn of revenue or production based royalties. Once these are included, our Group effective tax rate was 40.9%. The average comparable rate of ASX50 companies is approximately 30%iv.   For further details see Adjusted effective tax rate.

 

 

		Detailed financial information is included in Appendix 1

 

 

2

BHP | Financial results for the half year ended 31 December 2023

 

 

Cash flow and balance sheet

Strong cash flow generation underpinned US$5.1 bn of investments in the period.

 

Net operating cash flow   US$8.9bn h31%   HY23 US$6.8 bn   Capital and exploration expenditure   US$4.7 bn h57%   HY23 US$3.0 bn   Free cash flowii   US$3.8bn h9%   HY23 US$3.5 bn   Net debtii   US$12.6 bn   FY23 US$11.2 bn   HY23 US$6.9 bn   Gearing ratioii   21.7%   FY23 18.7%   HY23 12.9%		Our net operating cash flow increased by 31% as a result of the higher Underlying EBITDA and lower income tax and royalty-related taxation payments, partially offset by an increase in working capital.   In line with our Capital Allocation Framework (CAF), we generated free cash flow of US$3.8 bn after investing US$5.1 bn. Our investments in the period included:   •  US$3.4 bn in organic development including US$1.7 bn on improvement projects; US$1.3 bn major capital in future facing-commodities; and US$199 m of exploration spend; and   •  US$1.4 bn of maintenance and decarbonisation expenditurev.   Capital and exploration expenditure is expected to bevi:   •  For FY24 and FY25, ~US$10 bn per annum, including US$0.4 bn of exploration in FY24; and   •  In the medium term, ~US$11 bn per annum on averagevii.   We have flexibility to adjust capital spend and phasing of projects to accommodate market dynamics and cash flow generation.				BHP’s balance sheet remains strong. During the half, BHP issued US$4.8 bn of new bonds and retired US$5.7 bn of debt of which US$5 bn related to the OZL acquisition facility.   Our net debt increased by US$1.5 bn to US$12.6 bn from 30 June 2023, largely reflecting net operating cash flow more than offset by:   •  Payment of dividends to BHP shareholders of US$4.0 bn, and to non-controlling interests of US$0.6 bn; and   •  Capital and exploration expenditure of US$4.7 bn.   Our net debt target range of between US$5 and US$15 bn enables us to maintain a resilient balance sheet during periods of change and external uncertainty while retaining the flexibility to allocate capital within our CAF towards shareholder returns and growth opportunities.   For further details see Net debt waterfall.

 

 

		Detailed financial information is included in Appendix 1

 

 

3

BHP | Financial results for the half year ended 31 December 2023

 

 

Value and returns

Continuing to balance investing in the business and cash returns to shareholders.

 

Interim dividend   72 US cps   Fully franked   56% payout ratio		Earnings per share - basic   18.3 US cps   HY23 127.5 US cps		Our operations continued to generate strong Underlying ROCE of 26.4%, including 62% at WAIO.   An interim dividend of US$0.72 per share (US$3.6 bn), equivalent to a 56% payout ratio will be paid to shareholders on 28 March 2024.
Underlying return on capital employed (ROCE)ii   26.4%   HY23 29.4%		Earnings per share - Underlyingii   129.6 US cps   HY23 130.3 US cps		This extends our track record of strong returns. Including the determined dividend, we will have returned ~US$44 bn cash to shareholders since 1 January 2021.

Important dates for shareholders

BHP’s Dividend Reinvestment Plan (DRP) will operate in respect of the interim dividend. Full terms and conditions of the DRP and details about how to participate can be found at: bhp.com

 

Events in respect of the interim dividend		Date
Announcement of currency conversion into RAND			27 February 2024
Last day to trade cum dividend on Johannesburg Stock Exchange Limited (JSE)			5 March 2024
Ex-dividend Date JSE			6 March 2024
Ex-dividend Date Australian Securities Exchange (ASX), London Stock Exchange (LSE) and New York Stock Exchange (NYSE)			7 March 2024
Record Date			8 March 2024
Announcement of currency conversion into AUD, GBP and NZD			11 March 2024
DRP and Currency Election date			11 March 2024	1
Payment Date			28 March 2024
DRP Allocation Date2			15 April 2024

 

1	5:00pm AEDT.

2	Allocation dates may vary between registers but all allocations will be completed on or before 15 April 2024.

Shareholders registered on the South African branch register will not be able to dematerialise or rematerialise their shareholdings between the dates of 5 March 2024 and 8 March 2024 (inclusive), and transfers between the Australian register and the South African branch register will not be permitted between the dates of 27 February 2024 and 8 March 2024 (inclusive). American Depositary Shares (ADSs) each represent two fully paid ordinary shares and receive dividends accordingly.

Any eligible shareholder who wishes to participate in the DRP, or to vary a participation election should do so before 5:00pm (AEDT) on 11 March 2024, or, in the case of shareholdings on the South African branch register of BHP Group Limited, in accordance with the instructions of your CSDP or broker. The DRP Allocation Price will be calculated in each jurisdiction as an average of the price paid for all shares actually purchased to satisfy DRP elections. The DRP Allocation Price applicable to each exchange will be made available at: bhp.com/DRP

Corporate governance

Terry Bowen retired from the Board following the 2023 Annual General Meeting on 1 November 2023.

The current members of the Board’s committees are:

 

Risk and Audit Committee		Nomination and Governance Committee		People and Remuneration Committee		Sustainability Committee
Michelle Hinchliffe (Chair)		Ken MacKenzie (Chair)		Christine O’Reilly (Chair)		Gary Goldberg (SID) (Chair)
Xiaoqun Clever-Steg		Gary Goldberg (SID)1		Catherine Tanna		Ian Cockerill
Ian Cockerill		Michelle Hinchliffe		Dion Weisler		Catherine Tanna
Christine O’Reilly		Christine O’Reilly				Dion Weisler

 

1	Senior Independent Director (SID).

 

4

BHP | Financial results for the half year ended 31 December 2023

 

 

Economic outlook^viii

As was the case in recent periods, BHP’s external operating environment in CY23 was relatively volatile. Our key commodity prices were slightly higher overall but with significant variation in performance between individual commodities. We also continued to manage external cost inflation across the business.

In the long run, we expect that population growth, rising living standards, and the infrastructure required for global decarbonisation will drive demand for steel, non-ferrous metals and fertilisers.

In the near term, the economic outlook for the developed world is expected to improve modestly after a difficult year for both steel and non-ferrous metals demand in CY23. China and India are expected to remain relative sources of stability for commodity demand, as they have been over the last 12 months. The prices of steel-making raw materials, which are reliant on the physical fundamentals of trade into Asia, have performed better than the prices of non-ferrous metals over the last half year. Non-ferrous metals have greater exposure to weaker demand in the developed world and also to general investor sentiment, despite low exchange inventories. We anticipate that a more balanced global economy and evidence that the worst of the general inflationary wave is behind us, will have a positive impact on our industry in CY24.

On the cost front, while it is positive to see economy-wide inflation in our operating regions coming under control, we expect the lagged impacts from the inflation peak observed in FY23, as well as continued labour market tightness, to impact our cost base throughout the remainder of FY24. Wage inflation is especially problematic in the context of historically poor productivity performance across the resources industry.

Commodity demand

The demand for commodities in the developed world has been soft over the last 12 months due to anti-inflationary policies and the lagged impacts of the energy crisis. We believe that the lag effect of higher interest rates will continue to restrain household consumption in the developed world in the first half of CY24, but we expect that steel, copper and nickel demand will all be modestly firmer across the Organisation for Economic Cooperation and Development (OECD) in the coming 12 months. We also forecast another solid year for commodity demand in China, while India has considerable positive momentum behind it.

The Chinese economy has been volatile since the zero-COVID policy was eased in December 2022. CY23 saw a solid recovery in a range of sectors important to commodity demand including conventional infrastructure, lower GHG emission technology, manufacturing capital, automotive, shipbuilding and consumer durables. However, weakness continued in the steel-intensive real estate sector and in non-steel exports, and overall corporate profitability has been challenged. Throughout the year authorities have acknowledged that additional policies will be needed to support China’s economic recovery. For the balance of FY24 and into FY25, the key question remains how effective the policy push will be. Until we see greater coherence between the policies and their effective implementation, our outlook will remain cautious and conditional.

The demand picture has been more balanced in India supported by increasing capital investment, and commodity demand has been accordingly robust. The Indian economy has shown continued healthy momentum as the country moves towards a general election, which is expected to be held in the first half of CY24.

For the review and outlook relating to our individual commodities please refer to the relevant segment sections from page 7.

Costs and inflation

At our full year results in August 2023, we noted the lower rate of inflation on our cost base compared to recent periods. Whilst the spot price of certain input costs has normalised, the lagged effect of inflation continued to be felt through the business. Pressures in non-energy raw materials, logistics and manufacturing supply chains and energy risks have continued to ease, but labour costs remain a key forward-looking inflationary risk. The direct and indirect impact of current events in the Red Sea are not expected to alter the downward trend in global inflation, and at this stage have not had any material impact on our business.

 

5

BHP | Financial results for the half year ended 31 December 2023

 

 

With economy-wide inflation having noticeably eased in our main operational regions, additional pressure has also come out of industry-specific supply chains. We continue to expect some lagged effect of non-labour inflation (including pricing in contracts that reset periodically based on historical outcomes) to impact the business in the balance of FY24 and into FY25. The labour market remains a core inflationary concern, with aggregate wage outcomes in Australia increasingly disconnected from underlying productivity performance, which has been historically weak. This concern is amplified by regulatory reform underway in Australia, which will add to our labour costs and reduce the international competitiveness of the Australian economy.

Overall, the cost of mining production continues to be higher than it was prior to the pandemic. This implies that price support is also expected to be higher than in previous cycles and low-cost operators stand to capture potentially higher relative margins in certain commodities.

For more detail, please refer to our website.

 

6

BHP | Financial results for the half year ended 31 December 2023

 

 

 

 

		Detailed financial information on all business segments in the Financial performance summary

 

Segment and asset performance

 

Copper   Production   894 kt h7%   HY23 834 kt   FY24e 1,720 – 1,910 kt   Average realised price   US$3.66/lb h5%   HY23 US$3.49/lb   Underlying EBITDA   US$3.5 bn h23%   HY23 US$2.8 bn   25% contribution to the Group’s Underlying EBITDA   46% Underlying EBITDA margin   Underlying ROCE   10%   HY23 11%   Capital and exploration expenditure   US$2.0 bn   HY23 US$1.3 bn   FY24e US$4.2 bn		Commodity review and outlookviii   Despite a 5% increase in prices from HY23 to HY24, copper prices declined slightly over the CY23 period, with intra-year movement driven by shifting expectations of China’s recovery, and demand risk in the OECD from manufacturing weakness, global inflation and tighter financial conditions. Extremely low global copper inventories, rising mine costs and the sector’s vulnerability to operational disruptions helped to establish a higher floor for prices than seen in prior downturns in OECD manufacturing.   In the near term, we expect broad-based end-user demand growth in China to continue, albeit at a somewhat slower pace than the 6% YoY rate seen in CY23. That view includes an assumption of rapidly increasing investment in lower GHG technology for energy and transport. We anticipate a modest recovery in OECD copper demand. A broadly balanced market is the most likely outcome for CY24. That compares to our view of six months ago that a modest surplus was likely. The major difference in the two forecasts are reductions in primary supply announced by copper producers late in CY23. Uncertainty in primary supply remains a key swing factor. In the medium and longer term, traditional demand (such as home building, electrical equipment and household appliances) is expected to remain solid while the decarbonisation mega-trend is expected to bolster demand. In terms of meeting that demand, we anticipate that the cost curve is likely to steepen as challenges to the development of new resources (such as societal expectations, decarbonisation and water challenges) progressively increase. We anticipate that the industry is likely to enter the final third of this decade with a low inventory buffer, which implies that should deficits occur in this phase, as we expect they will, elevated pricing that is well above the cost curve may well occur during this period. Recent negative surprises to the primary supply outlook could bring deficits forward.   Segment outlook   Integration of the Copper South Australia province has successfully achieved more than US$50 m of annualised EBITDA synergies six months ahead of schedule, with each of Olympic Dam, Carrapateena and Prominent Hill delivering strong safety, production and development outcomes. We have also had exploration success in South Australia, announcing an Exploration Target at Oak Dam in July and multiple intersects of copper grade above 1% (and areas above 2%) beneath Olympic Dam (OD Deeps) in January. This operational performance, coupled with the significant resource base, provide a solid foundation on which to study further value realisation, including the potential to grow annual copper production at Copper South Australia to above 500 ktpa.   In Chile, we continue to progress a range of studies to unlock the next phase of value from our significant resource endowment and utilise latent capacity across our Escondida, Spence and Cerro Colorado operations. These include studying concentrator options at Escondida and the evaluation of multiple leaching technologies which could be applied across all three operations. We expect to provide further information on potential development pathways during CY24.   In Peru, Antamina has received environmental approval to extend operations from 2028 until 2036.

 

7

BHP | Financial results for the half year ended 31 December 2023

 

 

Escondida

 

Copper production		Unit cost1,2		Underlying EBITDA
528 kt h3%		US$1.51/lb h5%		US$2.3 bn h9%
HY23 511 kt		HY23 US$1.44/lb		HY23 US$2.2 bn
FY24e 1,080 – 1,180 kt		FY24e US$1.40 – US$1.70/lb
FY25 and FY26e 1,200 – 1,300 ktpa		FY25 and FY26e US$1.30 – US$1.60/lb

 

1	Based on average exchange rates of: HY24 USD/CLP 874 (realised); HY23 USD/CLP 920 (realised); FY24e – FY26e USD/CLP 810 (guidance).

2	Refer to Non-IFRS financial information for detailed unit cost reconciliation.

Financial performance

Underlying EBITDA increased by 9% primarily as a result of:

 

•

Higher copper prices, which had a favourable US$0.2 bn impact; and

 

•

Increased sales volumes in line with improved concentrator feed grade and higher concentrator throughput.

These were partially offset by higher operating costs, primarily reflecting inventory drawdowns to maintain concentrator ore feed and the impacts of inflation.

Asset outlook

Escondida production guidance for FY24 remains unchanged at between 1,080 and 1,180 kt, increasing to between 1,200 and 1,300 ktpa in FY25 and FY26, after which production is expected to decline to between 900 and 1,000 ktpa for a period in line with lower concentrator feed grades.

Escondida is assessing multiple options to offset the impact of lower concentrator feed grade, which is expected from FY27. These include the potential for a new concentrator to replace the current Los Colorados facility and the application of one or more leaching technologies to improve recoveries and unlock primary sulphide resources. We expect costs associated with the studies, which are captured as operating costs, to increase to ~US$140 m per year in both FY24 and FY25, from ~US$60 m in FY23.

Full SaL, a BHP designed leaching technology, is on track for first production in FY25 and is expected to unlock ~410 kt in copper cathodes over a 10-year period through improved recoveries and shorter leach cycle times. The capital expenditure to implement Full SaL is expected to be approximately US$300 m.

Deployment of autonomous haulage is expected to begin in the Escondida Norte pit in H2 FY24 and ramp up to approximately 50 autonomous trucks over the next three years. Escondida is evaluating transitioning its fleet of approximately 160 conventional haul trucks to autonomous operations over the next decade.

New royalties came into effect for Escondida from 1 January 2024. These will not be included in Escondida unit costs.

 

8

BHP | Financial results for the half year ended 31 December 2023

 

 

Pampa Norte 

 

Copper production		Spence unit cost1,2,3		Underlying EBITDA
138 kt ¯6%		US$1.98/lb ¯10%		US$0.4 bn h37%
HY23 147 kt		HY23 US$2.19/lb		HY23 US$0.3 bn
FY24e 210 – 250 kt1		FY24e US$2.00 – US$2.30/lb
Medium-term ~250 ktpa

 

1	Production and unit cost guidance for FY24 is provided for Spence only. Cerro Colorado produced 11 kt before ceasing production on 9 November 2023.

2	Based on average exchange rates of: HY24 USD/CLP 874 (realised); HY23 USD/CLP 920 (realised); FY24e USD/CLP 810 (guidance).

3	Refer to Non-IFRS financial information for detailed unit cost reconciliation.

Financial performance

Underlying EBITDA increased by 37% predominately as a result of:

 

•

Increased sales volumes at Spence driven in part by record concentrate production following improvement in concentrator throughput and recoveries;

 

•

Higher copper prices, which had a favourable US$51 m impact; and

 

•

Lower commodity-linked consumable prices.

These were partially offset by costs associated with Cerro Colorado’s transition to temporary closure in December 2023.

Asset outlook

Our application for environmental approval to extend the life of the Spence leaching facilities to 2039, was lodged in FY23. If approved, this would involve the implementation of a novel approach to re-processing previously leached ores followed by a planned medium-term transition to chalcopyrite ore leaching.

Spence remains on-track to achieve fully autonomous mine haulage operations in Q4 FY24 following the successful extension of autonomous truck operations to the cathode ore crushing circuit in January 2024. In total, Spence has deployed 23 of 33 planned autonomous trucks.

The concentrator plant modifications, which commenced in August 2022, are expected to be completed in FY24. In the Q2 FY24 Operational Review, we announced approval of an incremental US$570 m in sustaining capital to progress remediation of previously identified anomalies in the Spence Tailings Storage Facility (TSF). These remediation plans have been developed in consultation with the Engineer of Record, Independent Tailings Review Board and expert consultants.

Production guidance for Spence for FY24 remains unchanged at between 210 and 250 kt, and is expected to average 250 ktpa over the next five years. This guidance remains subject to successful remediation of the TSF anomalies.

Cerro Colorado entered temporary care and maintenance in December 2023. Cerro Colorado’s estimated expenditure of US$45 m for H2 FY24 remains unchanged. We are exploring options to extend the life of Cerro Colorado, including through the use of novel leaching technologies and desalinated water, which could see the operation restart after 2030, subject to environmental approvals.

 

 

9

BHP | Financial results for the half year ended 31 December 2023

 

 

Copper South Australia 

 

Copper production		Underlying EBITDA
154 kt h48%		US$0.6 bn h128%
HY23 104 kt		HY23 US$0.3 bn
FY24e 310 – 340 kt

Financial performance 

Underlying EBITDA increased 128% predominantly as a result of:

 

•

The contribution of US$0.3 bn from Carrapateena and Prominent Hill which were acquired in May 2023 as part of the acquisition of OZL; and

 

•

Higher average realised prices for copper, uranium, gold and silver, which had an impact of US$0.1 bn.

This was partially offset by inflationary impacts on labour and contractors, additional planned maintenance and increased exploration activity at Oak Dam and OD Deeps.

Asset outlook

Integration of OZL has successfully delivered more than US$50 m of annualised EBITDA synergies ahead of schedule through supply chain optimisation and reducing corporate overheads. The operations are performing well with record copper concentrate production at Carrapateena, record gold production at Olympic Dam and record development metres at Prominent Hill. We are looking to apply best practice from across the operations to further optimise operational performance and lift productivity.

Production guidance for FY24 remains unchanged at between 310 and 340 kt, net of the planned transfer of copper concentrate from Prominent Hill to Olympic Dam for processing to realise improved margins by processing high-uranium concentrate into cathode.

We are assessing options for a new two-stage smelter which could produce more than 500 ktpa of copper, with a Final Investment Decision expected between FY26 and FY27. In addition to productivity improvements mentioned above, we are undertaking the following growth projects:

 

•

At Prominent Hill, the Wira shaft mine expansion project is under construction. After a review of this project, it is expected to come online in FY26, for a total investment of US$673 m, both in-line with our estimates as part of the acquisition. The hoisting shaft is expected to extend the mine life to at least 2036 and may provide access to potential mineralisation outside the current mine plan.

 

•

At Carrapateena, the Block Cave Expansion project is progressing and is expected to (i) extend the mine life beyond the existing sub-level cave and (ii) increase production at Carrapateena from FY29. Crusher 2 is still expected to come online in Q3 FY24 and to ramp up in Q4 FY24, which will provide an uplift in mine productivity.

We have had continued exploration success at Oak Dam and OD Deeps, and are progressing the external approval process for an access decline at Oak Dam to enable faster and lower cost resource definition drilling of the mineral deposit.

 

 

10

BHP | Financial results for the half year ended 31 December 2023

 

 

Iron ore

 

Production   129 Mt ¯2%   HY23 132 Mt   FY24e 254 – 264.5 Mt   Average realised price   US$103.70/wmt h21%   HY23 US$85.46/wmt   Underlying EBITDA   US$9.7 bn h27%   HY23 US$7.6 bn   68% contribution to the Group’s Underlying EBITDA   69% Underlying EBITDA margin   Underlying ROCE   85%   HY23 61%   Capital and exploration expenditure   US$1.0 bn   HY23 US$0.9 bn   FY24e US$2.0 bn		Commodity review and outlookviii   China posted record iron ore consumption and near-record blast furnace utilisation rates in CY23, while India continued to exhibit rapid growth in steel production. In contrast developed regions saw steel output contract once again, albeit at a lesser rate than in CY22. The global result was a considerable improvement from the 4% decline in CY22, although the precise scale of the turnaround in China for CY23 is not clear from publicly reported data.   Over the next two years we expect a small further improvement in global steel production with growth led by India, Southeast Asia and to a lesser extent China. We expect that reduced drag from developed regions will also help.   In China, steel production was resilient at high levels in CY23, making it the 5th consecutive year the country produced more than 1 Bt of steel. Weakness in the real estate sector was more than offset by healthy growth in infrastructure, machinery and autos, as well as net steel exports reaching a seven-year high. In CY24 we expect modest growth in steel production in line with our long-held view that China’s steel production would sit at a plateau in the 1.0 to 1.1 Btpa range in the first half of the 2020s.   India was a continued bright spot with steel production rising around 12% to ~140 Mt in CY23. That is a 40% increase since the beginning of the decade. In CY24 we expect another year of strong growth as construction demand remains robust. Medium term, we note that the Indian government is targeting 300 Mtpa of steel-making capacity by 2030.   In iron ore, conditions improved in CY23 with a broadly balanced market overall, notwithstanding volatility in pricing within the year. For CY24 we expect similar dynamics for the mass balance, but with both supply and demand growth to slow somewhat from the rates of the prior year. Low-cost supply is not growing at a rate sufficient to displace the high-cost production which is required to keep the market balanced. Our estimate of real-time cost support sits in the US$80 – US$100/t range on a 62% Fe CFR basis, unchanged from our previous reporting period. How effectively China’s stimulus policy is implemented, especially with regards to real estate, and how the government chooses to regulate steel production, are both swing factors in CY24.   In the medium term, China’s demand for iron ore is expected to be lower than it is today as it moves beyond its crude steel production plateau and the scrap-to-steel ratio rises, though we expect demand for our products from elsewhere in developing Asia will offset this to a degree.   Segment outlook   At WAIO, we are focused on increasing production to greater than 305 Mtpa over the medium term. We are also studying options for growth of the WAIO business up to 330 Mtpa and we expect to complete these studies in CY25. Options under consideration include developing new mines, expanding and leveraging existing infrastructure, including at Yandi and Port Hedland, increasing ore beneficiation and building a new hub.   In Brazil, Samarco is ramping up production and supporting the local community through jobs, investment and taxes. The Renova Foundation continues to make progress on remediation activity and compensation.

 

11

BHP | Financial results for the half year ended 31 December 2023

 

 

Western Australia Iron Ore 

 

Iron ore production		Unit cost1,2		Underlying EBITDA
126 Mt ¯3%		US$18.46/t h1%		US$9.6 bn h27%
		C1ix US$15.98/t3
HY23 130 Mt		HY23 US$18.30/t		HY23 US$7.6 bn
FY24e 282 – 294 Mt (100% basis)		FY24e US$17.40 – US$18.90/t
Medium-term >305 Mtpa (100% basis)		Medium-term <US$17.00/t

 

1	Based on average exchange rates of: HY24 AUD/USD 0.65 (realised); HY23 AUD/USD 0.67 (realised); FY24e and medium-term AUD/USD 0.67 (guidance).

2	Refer to Non-IFRS financial information for detailed unit cost reconciliation.

3

C1 unit costs for HY23 were US$15.50/t. WAIO C1 unit cost excludes third party royalties of US$1.99 per tonne (HY23: US$1.52 per tonne), net inventory movements US$(0.43) per tonne (HY23: US$0.57 per tonne), depletion of production stripping US$0.77 per tonne (HY23: US$0.84 per tonne), exploration expenses, marketing purchases, demurrage, exchange rate gains/losses, and other income US$0.15 per tonne (HY23: US$(0.14) per tonne).

Financial performance

Underlying EBITDA increased by 27%, primarily driven by:

 

•

Higher average realised prices for iron ore, which increased by 21% and had a favourable impact of US$2.3 bn; and

 

•

Lower diesel prices.

This was partially offset by higher price-linked royalties and the impacts of inflation.

During HY24, WAIO maintained its lead as the lowest cost major iron ore producer globally with a C1 unit cost of US$15.98/t.

Asset outlook

South Flank remains on track to ramp up to full production capacity of 80 Mtpa (100% basis) by the end of FY24. South Flank’s high quality ore is expected to maintain WAIO’s average iron ore grade of at least ~61% (excluding Yandi) and increase the overall proportion of lump to between 30% and 33%.

WAIO production guidance for FY24 remains unchanged at between 282 and 294 Mt (100% basis). In support of growing the business to produce >305 Mtpa in the medium term, we are undertaking the following projects:

 

•

The Port Debottlenecking Project (PDP1) which remains on track to be completed in CY24 following commissioning in December 2023, and is expected to deliver an uplift in port throughput;

 

•

The Rail Technology Programme (RTP) will be rolled out over the next few years, and is expected to improve communications and signalling, enhance operational safety and reduce variability on our WAIO rail network;

 

•

The Western Ridge Crusher Project (WRC) was approved by the Board in February 2024 for an expected investment of US$943 m (100% basis). It is expected to deliver ~25 Mtpa (100% basis) from FY28 at a capital intensity of US$38/t, to replace production from the depleting orebodies around Newman.

Average annual sustaining capital expenditure guidance over the medium term, excluding costs associated with operational decarbonisation and our automation programs, remains unchanged at US$5.50/t^vi.

 

12

BHP | Financial results for the half year ended 31 December 2023

 

 

Samarco 

 

Iron ore production		Total Renova Foundation spend
2.5 Mt h13%		US$7.2 bn1 h22%
HY23 2.2 Mt		HY23 US$5.9 bn1
FY24e 4 – 4.5 Mt

 

1	Refers to total Renova spend since 2016 (100% basis).

Performance

Samarco continues to operate safely and efficiently since re-starting operations in December 2020. Production increased 13% in HY24 to 2.5 Mt (5.1 Mt on a 100% basis), as a result of higher concentrator throughput. Production guidance for FY24 remains unchanged at between 4 and 4.5 Mt.

The restart of the second concentrator, which will increase pellet production capacity to approximately 16 Mtpa (100% basis) through a filtration and dry stack tailings solution, is expected to deliver first production in Q3 FY25.

In December 2023, Samarco completed the restructure of its finances by issuing new debt under the Judicial Reorganisation process. All eligible employees and small suppliers who had claims under the Judicial Reorganisation process have been paid in full. The restructure provides Samarco with a stable financial position to support the funding of its remediation and compensation obligations, as well as to fund the expansion of its operations and continue to benefit its communities through job creation, investment and taxes.

Financials

BHP Brasil remains committed to supporting the Renova Foundation and its work to progress the remediation and compensatory programs to restore the environment and re-establish communities affected by the Samarco dam failure. Renova made strong progress during HY24, and since March 2016, it has paid compensation and financial assistance to approximately 430,000 people and completed approximately 84% of resettlement casesx.

For the half year ended 31 December 2023, BHP Brasil has recognised an income statement charge of US$3.2 bn in relation to the Samarco dam failure, which predominantly reflects the change in the assessment of the estimated costs to resolve all aspects of the Federal Public Prosecution Office Claim and the Framework Agreement obligations. As at 31 December 2023 BHP Brasil’s provision for the Samarco dam failure is US$6.5 bn.

For further information, please see note 9 – Significant events – Samarco dam failure for the Samarco dam failure provision.

 

13

BHP | Financial results for the half year ended 31 December 2023

 

 

Coal

 

Production   Metallurgical coal   11.3 Mt i17%   HY23 13.6 Mt   Energy coal   7.5 Mt h36%   HY23 5.5 Mt   Average realised price   Metallurgical coal   US$266.43/t i1%   HY23 US$268.73/t   Thermal coal – export   US$123.29/t i65%   HY23 US$354.30/t   Underlying EBITDA   US$1.0 bn i63%   HY23 US$2.6 bn   7% contribution to the Group’s Underlying EBITDA   26% Underlying EBITDA margin   Underlying ROCE   15%   HY23 55%   Capital and exploration expenditure   US$0.4 bn   HY23 US$0.2 bn   FY24e US$0.7 bn		Commodity review and outlook – Metallurgical coalviii   Metallurgical coal prices moved higher in the second half of CY23 on tight fundamentals, particularly on the supply side of the industry. Pig iron production grew strongly in India and China, while it contracted heavily in Europe and was flat in developed Asia. Australian seaborne supply fell for a 4th consecutive year, while Mongolian exports doubled year-on-year.   In the near term, based on public company guidance we expect a modest supply recovery from Australia into the seaborne market. The availability of land borne imports and the operational performance of Chinese domestic mines are key uncertainties for assessing China’s role in the seaborne trade in CY24. On seaborne demand, India is expected to maintain its current strong momentum while we believe that OECD importing regions are likely to see a gradual pickup in their steel industries.   Over the longer term, we believe that higher quality metallurgical coals (such as those produced by our BMA assets) will continue to be required in blast furnace steel-making for decades, driven by the growth of the steel industry in hard coking coal importing countries such as India. In particular, such higher quality coking coals are expected to be valued for their potential to help reduce the GHG emissions intensity of blast furnaces. And with the major seaborne supply region of Queensland having become less conducive to long-life capital investment as a result of changes to the royalty regime, the scarcity value of higher quality coking coals may well increase over time.   Segment outlook   Aligned with this longer-term forecast, our strategic objective is to focus on producing higher quality metallurgical coal. In October 2023, we announced that together with Mitsubishi Development Pty Ltd (our 50:50 joint venture partner in BMA) the sale of our Blackwater and Daunia mines to Whitehaven Coal for up to US$4.1 bn (100%). The sale is expected to complete on 2 April 2024.   In thermal coal, we are seeking the relevant approvals to continue mining at NSWEC beyond the current mining consent that expires at the end of FY26, and proceed with a managed process to cease mining at the asset by the end of FY30.

 

 

14

BHP | Financial results for the half year ended 31 December 2023

 

 

BMA 

 

Metallurgical coal production		Unit cost1,2		Underlying EBITDA
11.3 Mt i17%		US$129.00/t h29%		US$0.8 bn i43%
HY23 13.6 Mt		HY23 US$100.23/t		HY23 US$1.4 bn
FY24e 46 – 50 Mt (100% basis)		FY24e US$110 – US$116/t

 

1	Based on average exchange rates of: HY24 AUD/USD 0.65 (realised); HY23 AUD/USD 0.67 (realised); FY24e AUD/USD 0.67 (guidance).

2	Refer to Non-IFRS financial information for detailed unit cost reconciliation.

Financial performance

Underlying EBITDA decreased by 43% predominately driven by:

 

•

Lower sales volumes in line with lower production volumes, which had an unfavourable impact of US$0.4 bn; and

 

•

Higher costs as a result of the increase in prime stripping to recover depleted inventory positions following extended weather impacts and labour constraints in prior periods, the impacts of inflation, and planned higher maintenance activity, which were partially offset by lower diesel prices.

Queensland remains one of the highest royalty jurisdictions in the world. The change to the royalty regime in CY22 increased coal royalties to the highest maximum rate in the world, and resulted in an additional US$0.3 bn in royalties paid to the Queensland Government by BHP in relation to HY24 than would have otherwise been paid. Combined with income taxes, this equates to an adjusted effective tax rate including royalties of 62%.

Asset outlook

We are focused on improving value chain stability following depleted inventory positions arising from extended weather impacts and labour constraints over recent years, and we expect this will continue into CY25.

Following the planned sale of the Blackwater and Daunia mines, we expect 86% of BMA’s products will be sold by reference to the Platts PLV HCC FOB Qld index, the highest quality metallurgical coal index, increasing from 64% currently. BMA is also expected to benefit from simplified operations and transport logistics, including the sale and shipment of all products through the 100% owned Hay Point Coal Terminal. After the completion of the sale, we will no longer recognise the closure and rehabilitation provisions for the two sold mines of US$0.6 bn.

Given the negative impact on investment economics resulting from the change in coal royalty rates, and the increase in sovereign risk due to the decision to raise royalties without consultation, we will not be investing in any further growth in Queensland, however we will sustain and optimise our existing operations.

 

 

15

BHP | Financial results for the half year ended 31 December 2023

 

 

New South Wales Energy Coal 

 

Energy coal production		Underlying EBITDA
7.5 Mt h36%		US$0.2 bn i84%
HY23 5.5 Mt		HY23 US$1.2 bn
FY24e 13 – 15 Mt

Financial performance 

Despite higher sales volumes in line with strong production, Underlying EBITDA decreased by 84%, primarily due to lower average realised prices for thermal coal of 65% which had an unfavourable impact of US$1.7 bn.

The additional volumes resulted in higher operating costs, however these were more than offset by lower royalties (linked to lower prices).

Asset outlook

As announced in June 2022, we made the decision to retain NSWEC in our portfolio and proceed with a managed process to cease mining by the end of FY30.

We submitted a modification request to the NSW Government to extend mining approval to 30 June 2030 in support of the 2030 closure plan. The modification submission went on public exhibition for four weeks in November 2023. The approval process will continue through FY24 alongside continued stakeholder and community engagement on closure plans.

Subject to receiving the necessary approvals, as we look ahead to 2030 we will not be allocating any growth capital to NSWEC. We will continue to optimise the operation for value, with absolute costs expected to be stable in the medium term after a period of higher inflation and input prices. The royalty rates in NSW will rise from 8.2% to 10.8% for open cut mines, effective from 1 July 2024.

 

16

BHP | Financial results for the half year ended 31 December 2023

 

 

Group & Unallocated

Western Australia Nickel

 

Production   40 kt h4%   HY23 38 kt   FY24e 77 – 87 kt   Average realised pricexi   US$18,602/t ¯24%   HY23 US$24,362/t   Underlying EBITDA   US$(0.2) bn ¯276%   HY23 US$0.1 bn   Capital and exploration expenditure   US$0.8 bn   HY23 US$0.3 bn   FY24e US$1.4 bn		Commodity review and outlookviii   The nickel industry moved into significant surplus over the course of CY23 as Indonesian supply continued to grow at pace at a time of weak traditional end use demand in the OECD, and mixed outcomes across the electric vehicle value chain versus expectations. Indonesian production of Class-II nickel products is up around 3.6 times since CY19, and its production of intermediates has increased dramatically in the last two years. Whilst electric vehicle and battery demand grew across CY23, a significant destocking cycle in the battery value-chain impacted nickel and all battery metals. The conversion of Indonesian-origin nickel products into cathode, which the London Metal Exchange (LME) chose to allow onto its platforms, saw the significant non-Class-I surplus spill over into visible Class-I inventory, and then LME pricing. LME prices had fallen deep into the cost curve by the end of CY23. Whilst voluntary curtailments have been publicly announced by various operators, we estimate that we are in a multi–year run of surpluses that are likely to average out well over 5% of annual demand.   Longer term, we continue to believe nickel will be a core beneficiary of the electrification mega-trend and that nickel sulphides will be particularly attractive. Notwithstanding that, the industry is expected to experience a difficult multi-year run as excess current and committed supply is gradually absorbed by rising demand. Among the many cases we consider for this timing, our base case is that the market may rebalance by the late 2020s.   Financial performance   During HY24 we integrated the West Musgrave project with the Nickel West operations to create the Western Australia Nickel business unit. As the West Musgrave project is still in execution and is not yet operational, its financial impact for the period is seen in capital and exploration expenditure.   Despite higher production volumes at Nickel West, Underlying EBITDA decreased by US$0.3 bn, to a loss of US$(0.2) bn, predominantly as a result of:   •   Significantly lower realised prices for nickel metal and intermediate products, which had an unfavourable impact of US$0.3 bn; and   •   The unfavourable impact of inflation on the cost base including increased labour and contractor costs.   Nickel West also had increased deliveries of third party concentrate and ore, however the lower nickel prices in the period largely offset the impact of these volumes.   Due to the deterioration in the short-term and medium-term outlook for nickel, BHP has lowered its nickel price assumptions. In addition, capital costs for Western Australia Nickel have increased due to inflation. With regard to these factors, we have recognised an impairment of US$2.5 bn (post tax) against the carrying value of Western Australia Nickel. For further details please refer to note 2 – Exceptional items.   Business outlook   In the context of the above, we are assessing our plans for Western Australia Nickel. These include optimising operations, reducing discretionary expenditure and reviewing capital plans. We are also looking at the longer-term future of Western Australia Nickel, including potentially entering a period of care and maintenance at Nickel West, and assessing phasing and capital spend for the development of the West Musgrave project.

 

 

17

BHP | Financial results for the half year ended 31 December 2023

 

 

Potash

 

Capital expenditure   US$0.53 bn h64%   HY23 US$0.33 bn   FY24e US$1.2 bn   Underlying EBITDA   US$(0.13) bn   HY23 US$(0.09) bn		Commodity review and outlookviii   Potash prices declined across CY23 as prices reverted to more normal ranges with both demand and supply adjusting following the major supply related shocks of the last few years. The existing operations in Russia and Belarus are now back to around four-fifths of pre-shock capacity and global shipments are tracking at 93% of CY20 levels.   In the medium-term we expect existing capacity in Russia and Belarus to return to normal operating rates. However, new projects in the region are expected to face significant delays versus pre-sanctions timelines. Longer term, we believe that potash stands to benefit from the intersection of global mega-trends: rising populations, changing diets and the need for the more sustainable intensification of agriculture on finite arable land. We consider this compelling demand picture, rising geopolitical uncertainty and the maturity of the existing asset base to be an attractive, accelerated entry opportunity in a lower-risk supply jurisdiction such as Saskatchewan, Canada.   Business outlook   In October 2023 we announced an investment of US$4.9 bn for stage 2 of the Jansen potash project, which will increase our total planned potash production capacity to ~8.5 Mtpa (representing approximately 10% of forecast FY30 supply). Transitioning directly from Jansen Stage 1 (JS1) to Jansen Stage 2 (JS2) during the construction period brings a number of operational benefits including leveraging the experience of our integrated project team and continued use of our existing suppliers and contractors. This will allow us to realise potential synergies of ~US$300 m, which are embedded in JS2’s economics.

Jansen

 

		Progress		Production target date		Investment estimate
Jansen Stage 1
		38%		End-CY26		US$5.7 bn

Project update

JS1 is now 38% complete and on track to deliver first production at the end of CY26, with a two year ramp up period. In HY24, earthworks at JS1 continued, with the concrete foundations for the mill nearing completion. In H2 FY24, we expect to award all remaining major equipment and construction packages for JS1 and will continue to progress underground mine construction activities.

Construction of JS2 is expected to commence in Q4 FY24 and to take approximately six years, with first production expected in FY29, followed by a three year ramp up period. JS2 will have a capital intensity of US$1,050/txii, which is lower than JS1, due to leveraging existing and planned infrastructure. At third party consensus prices, the project is expected to generate an IRR of 15 – 18%, and EBITDA margins of 65 – 70%.

Capital expenditure in HY24 for JS1 and JS2 was US$0.53 bn and we remain on track to spend US$1.2 bn for the full year.

The US$0.13 bn of operating costs incurred at Jansen relate to site services, overheads, studies and social investments, which are expected to continue throughout the project.

 

 

18

BHP | Financial results for the half year ended 31 December 2023

 

 

Minerals exploration and early-stage entry

 

Exploration expenditure   US$199 m h28%   HY23 US$156 m		As well as the successes seen in Copper South Australia, we continued to build our portfolio of options in future facing commodities via high potential exploration projects, equity investments, joint ventures and farm-in agreements. Greenfield minerals exploration was also undertaken to advance copper targets in Sweden, Chile, Serbia, Peru, Canada, Australia and the United States.
		We have announced the second cohort of our accelerator program, Xplor. After reviewing several hundred applications, six early-stage minerals exploration companies were selected to join the program. They will each receive funding of up to US$500,000 and will have access to internal and external industry experts to support their growth. Additionally, several companies were selected from the first Xplor cohort for follow on investments, after successfully completing last year’s program.
		We closed the acquisition of Ragnar Metals’ Swedish projects, which included the Tullsta nickel sulphide project. Early drilling results at the project have demonstrated several significant intercepts. Elsewhere, we continue to progress nickel exploration activities in Australia and Canada. We also continued to progress our strategy of partnering with mining companies focused on early-stage copper and nickel exploration projects.
		In H2, we intend to pilot exploration trials using generative artificial intelligence. This work extends from a successful proof of concept of the technology in HY24 which achieved early success in retrieving information from large, unstructured government datasets.

 

19

BHP | Financial results for the half year ended 31 December 2023

 

 

Appendix 1

 

 

		Financial Report for the half year ended 31 December 2023

 

Financial performance summary¹

A summary of performance for the HY24 and HY23 financial years is presented below.

Key group metrics

 

		HY24 US$M				HY23 US$M				Change %
Revenue			27,232				25,713				6	%
Profit from operations			4,803				10,833				(56	%)
Attributable profit			927				6,457				(86	%)
Basic earnings per share (cents)			18.3				127.5				(86	%)
Interim dividend per share (cents)			72				90				(20	%)
Net operating cash flow			8,884				6,770				31	%
Capital and exploration expenditure			4,744				3,027				57	%
Net debt			12,648				6,910				83	%
Underlying EBITDA			13,875				13,230				5	%
Underlying attributable profit			6,569				6,597				(0	%)
Underlying basic earnings per ordinary share (cents)			129.6				130.3				(1	%)

Key asset metrics

 

Half year ended 31 December 2023 US$M		Revenue2				Underlying EBITDA3				Underlying EBIT3				Exceptional items4				Net operating assets3				Capital expenditure				Exploration gross				Exploration to profit
Copper
Escondida			4,427				2,347				1,897								12,737				853
Pampa Norte5			1,133				408				199								4,740				392
Antamina6			730				469				364								1,454				258
Copper South Australia7			1,853				591				232								16,061				581
Other6			22				(107	)			(141	)							322				68
Total Copper from Group production			8,165				3,708				2,551				—				35,314				2,152
Third party products			1,223				28				28				—				—				—
Total Copper			9,388				3,736				2,579				—				35,314				2,152				89				89
Adjustment for equity accounted investments6			(730	)			(263	)			(141	)			—				—				(258	)			(1	)			(1	)
Total Copper statutory result			8,658				3,473				2,438				—				35,314				1,894				88				88
Iron Ore
Western Australia Iron Ore			13,991				9,646				8,679								20,937				927
Samarco8			—				—				—								(6,272	)			—
Other			59				21				9								(127	)			—
Total Iron Ore from Group production			14,050				9,667				8,688				(2,899	)			14,538				927
Third party products			12				(1	)			(1	)			—				—				—
Total Iron Ore			14,062				9,666				8,687				(2,899	)			14,538				927				44				22
Adjustment for equity accounted investments			—				—				—				—				—				—				—				—
Total Iron Ore statutory result			14,062				9,666				8,687				(2,899	)			14,538				927				44				22
Coal
BHP Mitsubishi Alliance9			2,882				810				529								6,863				303
New South Wales Energy Coal10			980				257				216								(144	)			43
Other			—				(31	)			(44	)							(27	)			6
Total Coal from Group production			3,862				1,036				701				—				6,692				352
Third party products			—				—				—				—				—				—
Total Coal			3,862				1,036				701				—				6,692				352				7				2
Adjustment for equity accounted investments10			(76	)			(61	)			(49	)			—				—				—				—				—
Total Coal statutory result			3,786				975				652				—				6,692				352				7				2
Group and unallocated items
Potash			—				(129	)			(130	)							5,247				533				1				1
Western Australia Nickel11			725				(174	)			(240	)							(311	)			780				27				25
Other12			1				64				(174	)							(666	)			59				32				32
Total Group and unallocated items			726				(239	)			(544	)			(3,531	)			4,270				1,372				60				58
Inter-segment adjustment			—				—				—				—				—				—				—				—
Total Group			27,232				13,875				11,233				(6,430	)			60,814				4,545				199				170

 

20

BHP | Financial results for the half year ended 31 December 2023

 

 

Half year ended 31 December 2022 US$M		Revenue2				Underlying EBITDA3				Underlying EBIT3				Exceptional items4				Net operating assets3				Capital expenditure				Exploration gross				Exploration to profit
Copper
Escondida			4,089				2,160				1,737								12,103				605
Pampa Norte5			1,094				298				50								4,693				307
Antamina6			752				432				343								1,417				204
Copper South Australia7			1,133				259				62								9,911				270
Other6			1				(99	)			(108	)							(51	)			9
Total Copper from Group production			7,069				3,050				2,084				—				28,073				1,395
Third party products			988				8				8				—				—				—
Total Copper			8,057				3,058				2,092				—				28,073				1,395				64				61
Adjustment for equity accounted investments6			(752	)			(244	)			(154	)			—				—				(204	)			(3	)			—
Total Copper statutory result			7,305				2,814				1,938				—				28,073				1,191				61				61
Iron Ore
Western Australia Iron Ore			11,756				7,623				6,651								20,669				805
Samarco8			—				—				—								(3,235	)			—
Other			57				18				6								(41	)			7
Total Iron Ore from Group production			11,813				7,641				6,657				111				17,393				812
Third party products			9				—				—				—				—				—
Total Iron Ore			11,822				7,641				6,657				111				17,393				812				50				26
Adjustment for equity accounted investments			—				—				—				—				—				—				—				—
Total Iron Ore statutory result			11,822				7,641				6,657				111				17,393				812				50				26
Coal
BHP Mitsubishi Alliance9			3,598				1,426				1,125								7,426				183
New South Wales Energy Coal10			2,016				1,288				1,247								(209	)			50
Other			—				(29	)			(37	)							(11	)			4
Total Coal from Group production			5,614				2,685				2,335				—				7,206				237
Third party products			—				—				—				—				—				—
Total Coal			5,614				2,685				2,335				—				7,206				237				4				1
Adjustment for equity accounted investments10			(48	)			(54	)			(41	)			—				—				—				—				—
Total Coal statutory result			5,566				2,631				2,294				—				7,206				237				4				1
Group and unallocated items
Potash			—				(87	)			(88	)							4,008				325				—				—
Western Australia Nickel11			1,010				99				50								1,100				267				26				24
Other12			10				132				(98	)							(1,545	)			39				15				15
Total Group and unallocated items			1,020				144				(136	)			(31	)			3,563				631				41				39
Inter-segment adjustment			—				—				—				—				—				—				—				—
Total Group			25,713				13,230				10,753				80				56,235				2,871				156				127

 

1	Group profit before taxation comprised Underlying EBITDA; exceptional items, depreciation, amortisation and impairments of US$9,072 m (HY23: US$2,397 m) and net finance costs of US$821 m (HY23: US$652 m).

2	Total revenue from thermal coal sales, including BMA and NSWEC, was US$980 m (HY23: US$2,123 m).

3	For more information on the reconciliation of non-IFRS financial information to our statutory measures, reasons for usefulness and calculation methodology, please refer to non-IFRS financial information.

4	Excludes exceptional items relating to Net finance costs US$190 m and Income tax benefit US$978 m (HY23: Net finance costs US$222 m and Income tax benefit US$2 m).

5	Includes Spence and Cerro Colorado.

6

Antamina, SolGold and Resolution (the latter two included in Other) are equity accounted investments and their financial information presented above with the exception of net operating assets reflects BHP Group’s share. Group and Copper level information is reported on a statutory basis which reflects the application of the equity accounting method in preparing the Group financial statements – in accordance with IFRS. Underlying EBITDA of the Group and the Copper segment, includes depreciation, amortisation and impairments (D&A), net finance costs and taxation expense of US$263 m (HY23: US$244 m) related to equity accounted investments.

7	Includes Olympic Dam as well as Prominent Hill and Carrapateena which were acquired on 2 May 2023 as part of the acquisition of OZL.

8	Samarco is an equity accounted investment and its financial information presented above, with the exception of net operating assets, reflects BHP Billiton Brasil Ltda’s share. All financial impacts following the Samarco dam failure have been reported as exceptional items in both reporting periods.

9

On 18 October 2023, BHP announced the execution of Asset Sale Agreements for the divestment of BHP’s and Mitsubishi Development Pty Ltd’s respective interests in Blackwater and Daunia mines (part of the BHP Mitsubishi Alliance) to Whitehaven Coal. While BHP continues to report its share of profit and loss within the Coal Segment and asset tables, Blackwater and Daunia assets and liabilities have been classified as ‘Held for Sale’ and therefore excluded from Net Operating Assets. Refer to financial statements note 11 – ‘Assets and liabilities held for sale’ for further information.

10

Includes Newcastle Coal Infrastructure Group (NCIG) which is an equity accounted investment and its financial information presented above, with the exception of net operating assets, reflects BHP Group’s share. Total Coal statutory result excludes contribution related to NCIG until future profits exceed accumulated losses.

11	Includes Nickel West and West Musgrave which was acquired on 2 May 2023 as part of the acquisition of OZL.

12

Other includes functions, other unallocated operations including legacy assets and consolidation adjustments. Revenue not attributable to reportable segments comprises the sale of freight and fuel to third parties, as well as revenues from unallocated operations. Exploration and technology activities are recognised within relevant segments.

 

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