BHP profits soar on higher iron ore prices; Cautious on coronavirus

First half earnings at BHP surged 29% on the back of higher iron ore prices as the dividend payout was tempered by short term caution over the coronavirus.

Underlying earnings at the world's biggest miner rose to $5.2bn from $4.03bn a year earlier. The interim dividend was increased 18% to 65 cents a share, reflecting “caution due to near term market volatility driven by the 2019 coronavirus disease outbreak, trade policy and geopolitics”, BHP said on Tuesday.

The company said it expected the global economic growth to rise 3 – 3.5% this year but warned it would revise its forecast, and that for commodity demand, downward if the coronavirus was “not demonstrably well contained” by the end of March.

Underlying core earnings rose 15% to $12bn boosted by higher prices, operational stability, and foreign exchange rate tailwinds.

Petroleum production volumes were now expected to be at the bottom of guidance for the 2020 fiscal year as a result of the impact from Tropical Cyclone Damien on North West Shelf operations in early February 2020. The company maintained forecasts at between 110 - 116m barrels of oil.