BHP +4.09%: A strong result today from BHP for FY22, in fact, it was the 2nd best ever with a beat on earnings and dividend. Their operational performance was first class, particularly around cost control given they didn’t have the same commodity price tailwind as they did in FY21 with Copper & Iron Ore both lower. While the numbers were fairly complex given the spin-out of their petroleum division, we can get rid of some of the noise by focussing on Earnings Before Interest Tax Depreciation & Amortization (EBITDA) and to that end, they delivered US$40.634bn vs consensus $40.277bn a beat by ~1% with the standout division coal ahead by ~2% . Net Profit After Tax (NPAT) did miss however that was clouded by tax issues and asset sales relating to the petroleum demerger and coal asset sale. That said FY22 NPAT was the 2nd highest ever, behind FY11’s $23bn. Excluding the recent petroleum dividend, the FY22 ordinary divided was US325c ahead of consensus of US312c and a record ahead of FY21’s 310c – even with the payout ratio of 77% vs 89% in FY21. Don’t bank on this level of dividend continuing though, we expect higher capex moving forward plus of course, M&A should temper the payout in the years to come. BHP’s min dividend payout policy is 50% although the average since 2015 has been ~70-75%.
MM remains long & bullish BHP
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