BHP Group says its full-year profit came in 4% lower on a year over year basis

In a report on Tuesday, BHP Group (LON: BHP) said that its full-year profit came in 4% lower on an annualised basis that was also weaker than what the experts had forecast. BHP acknowledged the risk of a second wave of COVID-19 cases that it warned could sharply undermine growth.

Shares of the company were down 1.5% in premarket trading on Tuesday. The stock continued the slide and lost another 1% on market open. At £18.12 per share, BHP Group is currently more than 1% up year to date in the stock market after recovering from a low of £9.39 per share in March. Learn more about how to invest in the stock market.

BHP declares 41.74 pence a share of final dividend

In the year that concluded on 30^th June, BHP reported £6.87 billion of underlying profit ascribed to continuing operations. According to Refinitiv, analysts had anticipated a higher £7.15 billion or profit instead.

Referring to the global economic impact of the Coronavirus pandemic, CEO Mike Henry of BHP Group commented:

“With the exception of China, the world’s major economies will contract during the 200 calendar year as a result of the COVID-19 pandemic.”

BHP’s results were in contract with its peer, Rio Tinto, that last month published an annual profit that topped analysts’ estimates. Rio’s recovery in China followed a steep V-shaped pattern.

BHP’s board declared 41.74 pence of final dividend per share on Tuesday that matched its payout ratio. In comparison, the mining company paid a higher 59.19 pence of dividend last year.

The Anglo-Australian multinational also highlighted on Tuesday that it was considering a demerger or may even sell its assets in thermal coal. Bracing for a low-carbon future, BHP wishes to focus on energy-rich metallurgical coal.

BHP to divest its stake in Bass Strait oil and gas

The Melbourne-headquartered firm said last week that it will monitor the work of mining lobby groups to ensure their climate change policies are aligned with the broader targets. 

BHP also expressed plans of offloading its stake in Bass Strait oil and gas, and executive leadership changes in the upcoming months. The company, however, remains bullish on oil and sees potential for profit for another decade. Close to its existing assets, BHP added, it was still open to acquisitions.

At the time of writing, BHP Group is valued at £102.61 billion and has a price to earnings ratio of 12.75.