Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

BHP Group share price moderates after FY23 results show sharp profit decline

BHP has demonstrated resilience in a challenging market environment, leveraging smart operational strategies to boost production and maintain shareholder returns

Source: Bloomberg

Key takeaways:

1. Impressive operational performance: BHP Group achieved notable increases in iron ore, copper, and nickel production in FY23.

2. Decline in profit: Despite the positive operational performance, BHP experienced a significant decline in attributable profit from total operations for FY23

3. Reduction in net operating cash flow: The lower profit from operations resulted in a reduction in BHP's net operating cash flow.

4. Capital allocation and debt: BHP adhered to its Capital Allocation Framework (CAF) by generating free cash flow of $5.6bn, although the company's net debt increased by $4.3bn since December 2022.

5. Commitment to shareholders: Despite the financial challenges faced, BHP demonstrated its commitment to shareholders by announcing a final dividend of $0.80 per share, equivalent to a 59% payout ratio.

BHP Group FY23 results review

The BHP Group (BHP), a multinational mining, metals, and petroleum company, posted impressive operational performance figures for the financial year 2023 (FY23). The company recorded a 1% increase in iron ore production, a 9% hike in copper production, and a 4% rise in nickel production. These production increases were achieved due to record production at various BHP facilities, including Western Australia Iron Ore (WAIO), Olympic Dam, and Spence.

However, attributable profit from total operations for FY23 declined 58% from the prior year. Additionally, the underlying attributable profit, which adjusts FY22 for discontinued operations fell by 37%.

The company's net operating cash flow also saw a reduction due to the lower profit from operations. This was partially offset by the resultant reduced income tax and royalty-related taxation payments. Despite lower prices and sales volumes, revenue-based royalties at BHP Mitsubishi Alliance (BMA) increased following the introduction of the new Queensland royalty regime in July 2022.

In line with the Capital Allocation Framework (CAF), BHP generated free cash flow of $5.6bn after investing $13.1bn. However, the company's net debt increased by $10.8bn or $4.3bn since December 2022.

Despite the financial challenges, BHP demonstrated its commitment to its shareholders by announcing a final dividend of $0.80 per share, equivalent to a 59% payout ratio.

BHP has demonstrated resilience in a challenging market environment, leveraging smart operational strategies to boost production and maintain shareholder returns. The company's commitment to its capital allocation framework and shareholder value is commendable.

BHP Group (ASX) – technical view

Source: IG

The BHP Group currently trades within a sideways range bound between levels 42.20 (support) and 47.35 (resistance). The share price is looking oversold near the support of this range.
Range traders might hope to see a bullish price reversal above the 42.20 support level. In this scenario a move back towards resistance at 47.35 might be favoured, while a close below 42.20 would suggest the failure thereof.

BHP Group (JSE)

Source: IG

The BHP Group (SA listing) currently trades within a sideways range bound between levels 52250 (support) and 56800 (resistance). The share price is looking oversold near the support of this range.

Range traders might hope to see a bullish price reversal above the 52250-support level. In this scenario a move back towards resistance at 56800 might be favoured, while a close below 52250 would suggest the failure thereof.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.