Australian mining giant BHP has announced an underlying profit of $6.6bn (A$10.04bn) in the second half (H2) of 2023, the same as last year despite volatility in global commodity prices and demand in China. 

“The Chinese economy has been volatile since its zero-Covid policy was eased in December 2022. Uncertainty remains high, and the officials have acknowledged that additional policies will be needed to put China’s economic recovery on firmer ground,” BHP CEO Mike Henry said

In its financial results published on Tuesday, the company revealed net operating cash flow had increased 30.8% to $8.9bn in H2 2023 from $6.8bn in H2 2022. 

BHP spent $4.7bn on capital and exploration expenditures and recorded net debt of $12.6bn.

According to the company, the rapid growth of Indonesian supply is causing several structural changes in the nickel industry, citing a sharp price fall. BHP’s chief financial officer, David Lamont, said that “the price of nickel fell around 50% over the last year” due to structural changes. 

“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,” Henry added.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The mining giant recorded a non-cash impairment of $2.5bn from its Western Australia nickel business. 

The company’s significant drop in nickel profits was attributed to legal costs and compensation related to the Samarco dam collapse in Brazil in 2015. 

In H2 2023, the company’s underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) has seen a positive impact from increased iron ore prices (by 21%) and copper prices (by 5%). However, the company said the benefits were “partly offset by the decrease in energy coal and nickel prices”, while metallurgical coal prices remained “more or less in line with last year”.

BHP is not expecting any profits from its nickel operations before the end of the current decade, as reported by ABC News. This comes as its Nickel West business, considered a key area of growth for the company last year, reported its worst half-year profit result since 2016.