BHP Reports 6-Year Low Profit Despite Optimism for China Recovery and Rate Cuts

BHP, the world's largest listed miner, reported its lowest first-half profit in six years at $5.08 billion, down 23% from last year but slightly above estimates. CEO Mike Henry confirmed the company is focused on organic growth, abandoning acquisition plans after scrapping a $49 billion bid for Anglo American.

The miner declared an interim dividend of 50 cents per share, the lowest since 2017, aligning with market expectations. Iron ore earnings, BHP’s primary profit driver, fell 26% to $7.2 billion due to lower prices and cyclone-related disruptions in Australia, prompting a downward revision of its annual iron ore output forecast.

BHP remains optimistic about global demand recovery, citing central bank rate cuts and early economic rebound signs in China, along with resilient U.S. performance and India's strong growth. Copper operations surged 44% to $5 billion, fueled by tight supply, Chinese stimulus, and U.S. interest rate cuts. The company plans to invest $4.7 billion in copper expansion by June 2025, boosting output by 24% over three years.

Despite global trade uncertainties and potential tensions, BHP's exposure to U.S. tariffs is minimal, with the U.S. accounting for only 3% of its revenue. The miner expects global market adjustments if Canadian potash faces U.S. trade barriers. BHP’s focus on iron ore and copper, combined with global monetary easing, signals potential growth, even as risks from trade conflicts loom.