Rising costs, trade tensions weigh on shares of BHP

BHP Chief Executive Andrew Mackenzie, meanwhile, said the company was “a little more apprehensive” on the short-term outlook, given trade relations between China and the United States.

Escalating tensions between China, the biggest commodity consumer, and the U.S. have spooked metals markets and raised the prospect of reduced Chinese demand. Copper prices on the London Metal Exchange have fallen around 18 percent from a four-year high touched on June 7.

BMO Capital Markets, which rates BHP “market perform” said the results were “a touch light” versus estimates and flagged rising costs.

For the year ended June 30, underlying profit, which excludes one-time gains and losses, rose to $8.93 billion from $6.73 billion, supported by higher output and higher prices, just below an estimate of $9.27 billion according to 15 analysts polled by Thomson Reuters I/B/E/S.

BHP paid out a record final dividend of $0.63 a share, up from $0.43 a year ago, on the back of free cashflow of $12.5 billion from a strong operating performance and higher commodity prices.

Including one-time charges, BHP’s profit fell 37 percent to $3.71 billion.

BHP on Tuesday announced a $650 million charge for a failure at the Samarco dam, operated jointly by BHP and Vale. The dam collapse in 2015 killed 19 people in Brazil’s worst environmental disaster.

BHP also announced a $2.8 billion post-tax charge from the sale of the U.S. shale oil and gas assets.

Total revenue rose 20 percent to $45.81 billion. Revenue from iron ore mining, BHP’s biggest division, edged up 1.3 percent. Copper rose by nearly 60 percent driven by higher production from Escondida, the world’s largest copper mine, in Chile, where output was hit last year by a 44-day strike.

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