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BHP Group Ltd - Stock Quote BHP

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Morningstar's BHP Group Ltd Stock Analysis

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BHP Delivers Solid Third-Quarter Production Despite COVID-19 Challenges; FVE of AUD 44 Retained

Mathew Hodge, CFA Regional Director

Analyst Note

| Mathew Hodge, CFA |

No-moat BHP’s third-quarter fiscal 2022 production results were as expected. Western Australia Iron Ore production, which represents the bulk of BHP’s earnings, was flat on the previous corresponding period, or pcp, at around 67 million tonnes (100% basis). We think this is satisfactory, particularly given the impact COVID-19 has had on workforce availability both in Australia and overseas. Improved weather compared with the pcp and increased output from BHP’s South Flank mine offset the impact from COVID-19. South Flank produced at an annualised rate of 58 million tonnes during the quarter and remains on track to ramp up to full production of 80 million tonnes per year by 2023. We expect further impacts on staffing levels during the rest of calendar 2022 as Western Australia continues to manage the current COVID-19 outbreak. But we think this will reduce in significance given the worst of the state’s delayed outbreak appears to have passed. Despite inflation increasing costs across the mining industry, BHP has maintained good control of unit costs. The result generally met our expectations, and we make only minor changes to our model.

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BHP Group Ltd's Company Profile

Business Description

BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.

171 Collins Street, Level 18
Melbourne, VIC, 3000, Australia
T +61 396093333
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 34,478