Australian mining company BHP Billiton has announced its financial results for the financial year 2020 ended on June 30.
Accordingly, BHP Billiton has posted a net profit of US$7.96 billion for the financial year 2020, down by four percent compared to a net profit of US$8.3 billion in the previous financial year, while the company's revenue decreased by three percent year on year to US$42.93 billion. Also, BHP has announced that it will be paying a record final dividend of 55 cents a share, which is worth $2.8 billion in total, compared to a final dividend of 78 cents a share, which was worth $3.9 billion in total in the previous financial year.
Meanwhile, BHP Billiton reported EBITDA of $22.1 billion for this year, decreasing by five percent compared to $23.16 billion in the previous year, while its EBITDA margin remained stable year on year at 53 percent in the same period.
The company stated that the potential for second wave of the coronavirus pandemic creates uncertainty for the next year outlook. It also anticipates that global crude steel production will decline in the 2020 calendar year, with solid growth in China offset by a steep fall in the rest of the world.
BHP said that iron ore prices have been elevated since the Brumadinho tailings dam tragedy in Brazil first disrupted the market in early 2019 but can be expected to ease as Brazilian supply recovers. In the second half of the 2020s, China’s demand for iron ore is expected to be lower than today as crude steel production plateaus and the scrap-to-steel ratio rises. At the same time, the likelihood of new supply of iron ore from West Africa has increased. This implies that it will be even more important to create competitive advantage and to grow value through driving exceptional operational performance. In the long-term, prices are expected to be determined by high cost production, from Australia or Brazil. Quality differentiation will remain a factor in determining iron ore prices.
BHP Billiton’s Chief Executive Officer, Mike Henry said that the company expects most major economies, except for China, to contract heavily in 2020 as a result of the coronavirus pandemic and recovery will vary considerably by country. The company remains positive in its outlook for long-term global economic growth and commodity demand. He also added that the company’s development projects and exploration programs are progressing well and in line with its strategy.