BHP Declares Results for Year Ended 30 June 2021
BHP has released its results for the year ended 30 June 2021. BHP said “BHP delivered a strong set of results for the 2021 financial year, with a safe and reliable operational performance and strong financial returns. Our strategy is to deliver long-term value and returns through the cycle. We aim to do this through owning a portfolio of world class assets with exposure to highly attractive commodities which benefit from the mega-trends playing out in the world around us, by operating them exceptionally well, by maintaining a disciplined approach to capital allocation and through being industry leaders in sustainability and the creation of social value.”
Operational excellence: Strong operational performance and free cash flow generation, with a margin of 64%
Strong underlying operational performance, with record volumes achieved at Western Australia Iron Ore (WAIO), Goonyella and Olympic Dam, and Escondida maintained average concentrator throughput at record levels.
Profit from operations of US$25.9 billion, up 80%, and Underlying EBITDA of US$37.4 billion at a record11'1 margin of 64%.
Attributable profit of US$11.3 billion (includes an exceptional loss of US$5.8 billion predominantly related to the impairments of our potash and energy coal assets, and the current year impact of the Samarco dam failure). Underlying attributable profit of US$17.1 billion, up 88% from the prior year.
Net operating cash flow of US$27.2 billion, above US$15 billion for the fifth consecutive year, and record free cash flow of US$19.4 billion, reflects higher iron ore and copper prices, and a strong operational performance.
Disciplined capital allocation: Four major projects delivered and early stage options added
Capital and exploration expenditure within guidance at US$7.1 billion. Minerals capital and exploration expenditure is expected to be approximately USS6.7 billion for the 2022 financial year (and a further US$2.3 billion for Petroleum).
Successfully achieved first production at four major development projects, all of which were delivered on or ahead of schedule and on budget. We acquired an additional 28% working interest in Shenzi in November 2020. The Shenzi North development, a two-well subsea tie-in to the Shenzi platform, was approved in August 2021.
In exploration, we have continued to add to our early stage options in future facing commodities throughout the year, with the recently announced recommended all-cash takeover offer of Noront Resources in Canada, the signing of an agreement for a nickel exploration alliance in Canada and of a farm-in agreement for the Elliott copper project in Australia. At Oak Dam in South Australia, next stage resource definition drilling commenced in May 2021.
Net debt at US$4.1 billion, compared to US$12.0 billion at 30 June 2020. In light of our announcement to pursue a merger of our Petroleum business with Woodside, we will be reviewing our net debt target and will provide an update with our interim results for the 2022 financial year in February 2022.