Proactive Investors - BHP Group (LON:BHPB) Ltd (LSE:BHP, ASX:BHP)’s final results should have been a relatively straightforward update but the unfolding property and economic crisis in China might just have changed the mood.
Along with Rio Tinto (LON:RIO) and Vale, BHP is one of the world’s “iron ore monsters” delivering around a billion tonnes/year of ore to the seaborne market (65% of total) of which China takes a sizeable chunk.
In July, the Aussie-listed group said it had met its targets in the year just ended with 285 million tonnes of iron produced, adding the year ended on a strong note as it forecast production of 282-294Mt in the current 12 months.
That though was before the latest China wobble and with steel mills huge iron ore users and Chinese property firms big copper customers, investors will be watching to see if that reasonably bullish tone has become more muted.
Consensus is for a decline in revenue and profit, as the prices of iron ore, copper and coal have fallen back from last year’s elevated levels.
Costs and margins will also be in focus, as inflation has been a headwind for the entire sector.
Consensus forecasts are for annual revenues of US$54.3 billion and underlying profits (EBITDA) of US$28 billion with net income of US$13.2 billion.