BHP eyes demand green shoots in China as profit slumps

Global miner BHP Group reported a steeper-than-expected 32% fall in first-half profit owing to a drop in iron ore prices, sending its shares down, although it flagged a brightening outlook in China, its biggest customer.

China’s strict zero-COVID-19 policy curtailed economic activity and dented demand over the past year, driving iron ore prices down from lofty levels, while miners wrestled with surging costs and a tight labour market in Australia.

As a result, the world’s largest listed miner reported underlying profit attributable from continuing operations of $6.6 billion, down from $9.72 billion a year earlier.

That missed a Vuma Financial estimate of $6.82 billion, as earnings from copper and coal came in lower than analysts had expected. BHP’s giant Escondida copper mine was hit by road blockades in Chile that disrupted mining supply deliveries.

However, its interim dividend of 90 cents per share, while down 40%, beat Vuma Financial’s estimate of 88 cents.