BHP FY profit slides as China metal demand dries up, shares dip

Investing.com -- BHP Group (ASX:BHP), the world’s largest miner, clocked a sharp decline in its fiscal 2023 profit on Tuesday as weakening metal demand in China, particularly for iron ore, weighed heavily on sales through the year.

Underlying profit attributable for the year to June 30 slid 37% to $13.4 billion - its weakest annual profit in three years. This was driven by a 17% drop in annual revenue to $53.8B. 

The Anglo-Australian miner declared a final dividend of $0.80 a share, down from $1.75 per share last year. BHP shares fell as much as 2% after the results, dragging the ASX 200 index down 0.3%.

BHP saw an 18% decline in average realized prices on its iron ore sales through fiscal 2023, as weakening demand in China pulled down spot prices sharply over the past year.

China is grappling with a slowing post-COVID economic recovery, with manufacturing and real estate, the country’s biggest economic drivers, having failed to pick up despite the lifting of anti-COVID restrictions at the beginning of 2023.

A brewing debt crisis in China’s property market has been a key source of concern, given that the sector is a major driver of metal demand. Some of the country's biggest property firms are facing a potential default, which could cause contagion in the economy.

Still, BHP said that despite recent weakness, China and India are expected to remain a steady source of commodity demand, and that demand in the developed world has slowed substantially.

BHP is also facing increased costs in Australia due to a rising cost of living and a tight labor market - a trend that is expected to continue through 2024. 

BHP peer Rio Tinto Ltd (ASX:RIO) had in July also logged a drop in its half-year earnings, stemming from weakness in China and iron ore prices. Shares of the firm edged lower on Tuesday.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.8% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: