BHP Earnings: Copper Likely to Grow at the Expense of Iron Ore

No-moat BHP’s fiscal 2024 adjusted EBITDA of USD 29 billion was about 4% lower than we expected. However, it increased 4% on last year, driven by higher prices and foreign exchange, partially offset by increased unit cash costs. Adjusted NPAT of USD 13.7 billion, or USD 2.69 (AUD 3.96) per share, was modestly higher than a year ago. BHP will pay a fully franked final dividend of USD 0.74 (about AUD 1.09) per share in October, taking total fiscal 2024 dividends to USD 1.46 (AUD 2.15) per share fully franked, down 14%. The 54% payout ratio was in line with its target minimum of 50% but reduced on last year’s 64% payout ratio. Management guided to a higher effective tax rate but lower unit costs at Escondida and Copper South Australia than we expected.