REG - BHP Group Limited - Half-Year 2025 Report and Accounts
18/02/2025 07:15
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RNS Number : 4294X BHP Group Limited 18 February 2025
BHP Group Limited
Financial results for the half year ended 31 December 2024
18 February 2025
Operational excellence underpins strong returns and investment in growth
"BHP reported a strong financial performance for the half-year, underpinned by
safe and reliable operations and rigorous cost control. The Group's
industry-leading margins and robust cash flow enabled the Board to determine
an interim dividend of 50 US cents per share - a total of US$2.5 billion. The
strength of the result demonstrates BHP's operational resilience and its
ability to perform through the cycle, with standout production performances in
the half from Escondida, WAIO and BMA. WAIO has maintained its lead as the
lowest-cost iron ore producer globally, a testament to our ongoing work to
drive productivity at our operations.
We continued to invest in growth, including US$3.2 billion in potash and
copper, and have now also successfully completed the US$2.0 billion formation
of Vicuña Corp, a 50/50 joint venture with Lundin Mining to develop the
combined Filo del Sol and Josemaria copper projects in an exciting prospective
region in Argentina.
In Brazil, the signing of a comprehensive settlement agreement during the half
will deliver expanded programs for the environment and communities, while also
providing greater clarity on future cash flows related to the tragedy.
The demand for BHP products remains strong despite global economic and trade
uncertainties, with early signs of recovery in China, resilient economic
performance in the US and strong growth in India. The trajectory of the world
population growing from eight billion today to 10 billion in 2050, with more
people living in cities, together with the energy transition and the growth of
data centres and AI, will compound the need for more metals and minerals.
Against this backdrop, BHP is well-positioned, with the ability to leverage
our strong balance sheet, technical know-how and sustainable business
practices to deliver growth and resilient shareholder returns.
Ross McEwan will succeed Ken MacKenzie as Chair on 31 March 2025. We thank Ken
for the instrumental role he has played in shaping BHP and look forward to
Ross' leadership as Chair of BHP."
Mike Henry
BHP Chief Executive Officer
Safety Operational excellence
Focus on fatality elimination Copper equivalent production Up 5.3% i (#_edn1)
High Potential Injury frequency ii (#_edn2) declined ~54% from H2 FY24, with Group copper production increased 10%, driven by a 22% increase at Escondida.
zero high potential injuries recorded in Q2 FY25. Strong underlying operational performance at all other assets, including at
WAIO where production was up 1% and at BMA where production increased 14%
(excluding production from the now divested Blackwater and Daunia mines).
Financial results Net cash tax paid
Attributable profit Net income tax and royalty-related taxation
US$4.4 bn US$3.4 bn
HY24 US$0.9 bn HY24 US$3.6 bn
The Group's Attributable profit reflects our strong underlying operational BHP continues to be one of the largest corporate taxpayers in Australia, as is
performance and disciplined cost control amid the lower price environment. Escondida in Chile. Our global adjusted effective tax rate(iii) was 36.4% and
Underlying attributable profit iii (#_edn3) decreased 23% (after adjusting increases to 44.2% once revenue and production-based royalties are included.
for the HY24 exceptional losses).
Total copper proportion of Group Underlying EBITDAiii increased to 39% (HY24:
25%), reflecting a 10% increase in copper volumes and higher copper prices.
Investing in growth Shareholder value
Capital and exploration expenditureiii Fully franked interim dividend
US$5.2 bn Up 10% US$0.50 per share
HY24 US$4.7 bn 50% payout ratio
We invested US$3.2 bn in potash and copper and expect to invest ~65% of our We have determined an interim dividend of US$2.5 bn.
medium-term capital on these future-facing commodities.
In February 2025, BHP announced that Ken MacKenzie will retire from the Board
In January 2025, we completed the formation of Vicuña Corp. (Vicuña), a on 31 March 2025. The Board has elected Ross McEwan to succeed as Chair
50/50 joint venture with Lundin Mining to develop the combined Filo del Sol (https://announcements.asx.com.au/asxpdf/20250212/pdf/06ffyzx7rrr456.pdf) from
(FDS) and Josemaria copper projects. this date.
1
BHP | Financial results for the half year ended 31 December 2024
Group financial performance
Earnings and margins
Strong underlying operational performance provides resilience against lower
prices
Revenue BHP's strong underlying operational performance delivered increased sales Our adjusted effective tax rate increased primarily due to the impact of
volumes in our key commodities: copper, iron ore and steelmaking coal. iv higher rates under the new Chilean mining tax regime that applied from
US$25.2 bn Down 8% (#_edn4) 1 January 2024, and increased earnings from Chilean copper.
HY24 US$27.2 bn Revenue however decreased US$2.0 bn primarily as a result of the decline in The adjusted effective tax rate for FY25 is expected to be within the guidance
realised iron ore and steelmaking coal prices. This was partially offset by range of 33% to 38%.
higher realised copper prices.
Our operating costs included US$1.3 bn of revenue or production-based
Attributable profit Our productivity initiatives and cost discipline, combined with favourable royalties. Including these payments, our Group effective tax rate was 44.2%
foreign exchange movements, allowed us to mitigate a global inflation rate of (HY24: 40.9%). For further details see A (#_Effective_tax_rate) djusted
US$4.4 bn Up 376% ~3.7%, which was predominantly driven by higher labour costs. (#_Effective_tax_rate) (#_Effective_tax_rate) Effective tax rate
(#_Effective_tax_rate) .
HY24 US$0.9 bn As a result, unit costsiii were ~3.9% v (#_edn5) lower across our major
assets, with WAIO maintaining its position as the lowest cost major iron ore We recorded Attributable profit of US$4.4 bn through disciplined cost control
producer globally and Escondida delivering a 12% reduction in unit costs. and strong operational performance, amid the lower price environment.
Underlying attributable profit decreased 23% (after adjusting for the HY24
Underlying attributable profit Overall, Underlying EBITDA decreased 11% due to the lower revenue. The exceptional losses).
contribution from copper increased to 39% of Group Underlying EBITDA (HY24:
US$5.1 bn Down 23% 25%) reflecting a 10% increase in copper volumes and higher copper prices. For further details see
Note (#_2.__) (#_2.__) 2 - Exceptional items (#_2.__) and
HY24 US$6.6 bn Our Underlying EBITDA margin remained strong at 51.1%. Our 20-year average N (#_9.__) ote 9 - Significant events - Samarco dam failure (#_9.__) .
Underlying EBITDA margin is greater than 50%. vi (#_edn6)
For further details see
Profit from operations Underlying EBITDA waterfall (#_Underlying_EBITDA_waterfall_7) .
US$9.1 bn Up 90%
HY24 US$4.8 bn
Underlying EBITDA
US$12.4 bn Down 11%
HY24 US$13.9 bn
Underlying EBITDA marginiii
51.1%
HY24 53.3%
Adjusted effective tax rate
36.4%
HY24 31.0%
FY25e 33 - 38%
Detailed financial information is included in Appendix 1 (#_Appendix_1_3)
2
BHP | Financial results for the half year ended 31 December 2024
Cash flow and balance sheet
Conservatively geared balance sheet underpinned by net operating cash flows
supports organic investments
Net operating cash flow Our net operating cash flow decreased as a result of lower realised prices, After investing in line with our CAF, our net debt increased by US$2.7 bn
particularly in iron ore. from 30 June 2024 to US$11.8 bn reflecting:
US$8.3 bn Down 6%
We generated free cash flow of US$2.6 bn after investing US$5.2 bn in line · Payment of dividends to BHP shareholders of US$3.9 bn, and to
HY24 US$8.9 bn with our Capital Allocation Framework (CAF). non-controlling interests of US$1.1 bn; and
Our investments included: · US$0.6 bn in Samarco settlement obligations. Future Samarco
settlement obligations up to FY28 have been hedged to protect against
Capital and exploration expenditure · US$3.8 bn in organic development including US$1.6 bn on growth in potential foreign exchange volatility.
potash and copper, US$1.4 bn on improvement projects; plus US$0.2 bn of
US$5.2 bn Up 10% exploration spend; and BHP's business is stronger now than when we revised the net debt target range
in 2022. We have a more resilient portfolio, with increased exposure to
HY24 US$4.7 bn · US$1.4 bn of maintenance and decarbonisation expenditure. vii future-facing commodities. We maintain a low net debt/EBITDA ratio relative to
(#_edn7) industry competitors of 0.4x. x (#_edn10) Our global credit ratings(( xi
FY25e ~US$10 bn
(#_edn11) )) remained unchanged in HY25. Moody's rating is A1(stable)/P-1 and
Capital and exploration expenditure guidance remains unchanged: viii (#_edn8) Fitch's rating is A (stable)/F-1 (long-term/short-term respectively).
· ~US$10 bn for FY25, including ~US$0.5 bn of exploration; and For FY25, the Group's net debt balance is expected to increase to around the
Free cash flowiii
top end of the net debt target range following completion of the Vicuña
· ~US$11 bn for FY26 and per annum on average in the medium term. ix transaction and payment of the H2 Samarco settlement obligations.
US$2.6 bn Down 30% (#_edn9)
Disciplined application of our CAF enables us to maintain a resilient balance
HY24 US$3.8 bn We have a strong pipeline of growth projects, including at Jansen, Escondida, sheet while retaining the flexibility to allocate capital within our CAF
Copper South Australia, WAIO and Vicuña. We maintain flexibility to adjust towards shareholder returns and growth opportunities. We are comfortable to
capital spend and phasing of projects to accommodate market dynamics and cash move above our net debt target temporarily to execute value accretive
flow generation. opportunities and support future investments such as Vicuña.
Net debtiii
For further details see Net debt (#_Net_debt_waterfall)
US$11.8 bn
(#_Net_debt_waterfall) waterfall (#_Net_debt_waterfall) .
FY24 US$9.1 bn
HY24 US$12.6 bn
Gearing ratioiii
19.2%
FY24 15.7%
HY24 21.7%
3
BHP | Financial results for the half year ended 31 December 2024
Detailed financial information is included in Appendix 1 (#_Appendix_1_3)
Value and returns
Continuing to balance investment in the business and cash returns to
shareholders
Interim dividend Earnings per share - basic Our operations continued to generate strong Underlying ROCE of 20.4%, with
Escondida and WAIO achieving 29% and 44% respectively.
50 US cps 87.1 US cps
An interim dividend of US$0.50 per share (US$2.5 bn) has been determined,
Fully franked HY24 18.3 US cps equivalent to a 50% payout ratio, with a payment date to shareholders of 27
March 2025.
50% payout ratio
This extends our track record of strong returns while balancing investment in
growth. Including the determined HY25 interim dividend, we will have returned
~US$50 bn cash to shareholders since 1 January 2021.
Underlying return on capital employed (ROCE)iii Earnings per share - Underlyingiii
20.4% 100.2 US cps
HY24 26.4% HY24 129.6 US cps
Important dates for shareholders
BHP's Dividend Reinvestment Plan (DRP) will operate in respect of the interim
dividend. Full terms and conditions of the DRP and details about how to
participate can be found at: bhp.com/DRP (http://www.bhp.com/drp)
Events in respect of the interim dividend Date
Announcement of currency conversion into RAND 25 February 2025
Last day to trade cum dividend on Johannesburg Stock Exchange (JSE) 4 March 2025
Ex-dividend Date JSE 5 March 2025
Ex-dividend Date Australian Securities Exchange (ASX) and London Stock 6 March 2025
Exchange (LSE)
Ex-dividend Date New York Stock Exchange (NYSE) 7 March 2025
Record Date 7 March 2025
Announcement of currency conversion into AUD, GBP and NZD 11 March 2025
DRP and Currency Election date 11 March 2025(1)
Payment Date 27 March 2025
DRP Allocation Date(2) 10 April 2025
1 5:00 pm AEDT.
2 Allocation dates may vary between registers but all allocations
will be completed on or before 10 April 2025.
Shareholders registered on the South African branch register will not be able
to dematerialise or rematerialise their shareholdings between the dates of 4
March 2025 and 7 March 2025 (inclusive), and transfers between the Australian
register and the South African branch register will not be permitted between
the dates of 25 February 2025 and 7 March 2025 (inclusive). American
Depositary Shares (ADSs) each represent two fully paid ordinary shares and
receive dividends accordingly.
Any eligible shareholder who wishes to participate in the DRP, or to vary a
participation election should do so before 5.00 p.m. (AEDT) on 11 March 2025,
or, in the case of shareholdings on the South African branch register of BHP
Group Limited, in accordance with the instructions of your CSDP or broker. The
DRP Allocation Price will be calculated in each jurisdiction as an average of
the price paid for all shares actually purchased to satisfy DRP elections. The
DRP Allocation Price applicable to each exchange will be made available at:
bhp.com/DRP (https://www.bhp.com/drp/)
4
BHP | Financial results for the half year ended 31 December 2024
Economic outlook
In HY25, prices for BHP's key commodities were mixed, with copper rising
marginally and steel raw materials trending lower over the period.
The global economy grew at 3.2% in CY24, with services outperforming
industrial activity, which has led to slowing commodity demand in many
economies. In the near term, the global growth outlook is likely to remain at
around 3% for CY25 and CY26, but the impact of policy on trade and inflation
remains a key uncertainty, particularly for the United States and its trade
partners. Developed economies are expected to gradually recover, as interest
rates continue to be lowered, with the US economy likely to outperform other
developed markets. China met its 5% annual growth target for CY24 and is
expected to draw upon policy support to rebalance its economy and improve
domestic demand in the near term. Meanwhile, India is likely to remain as the
fastest growing major economy. Inflation has eased across our major operating
regions, but we still expect lingering labour market tightness to impact the
mining sector's cost base in the remainder of FY25.
Commodity demand
Demand for commodities in the developed world continued to be soft in CY24 as
sluggish industrial activity persisted. Central Banks' ongoing rate cuts are
expected to translate into a recovery for steel and copper demand across the
OECD in the near‑term. However, potential trade tensions present a risk to
the recovery in developed economies and across the globe.
China recently reiterated a pro-growth policy stance with more accommodative
monetary and proactive fiscal measures. In the face of external trade
uncertainty, policymakers have vowed to boost domestic demand via several
measures that should support steel and metals-related manufacturing demand.
China's housing sales have shown some signs of stabilisation as national new
home sales turned to growth in Q4 CY24, following the persistent decline since
Q3 CY21. Nevertheless, a recovery in construction activity is expected to take
longer than sales to recover. Despite soft demand from the property sector,
Chinese steel production in CY24 was supported by continuing infrastructure
investment, manufacturing activity and resilient steel exports mainly to the
global south. Manufacturing exports have been supported by high volumes into
emerging economies despite reduced exports to the developed world. Chinese
copper demand should maintain its growth trajectory despite external risks.
India continues to be a bright spot for commodity demand. While we anticipate
a marginal cyclical deceleration across the Indian economy in the next two
years, our view on its underlying structural growth potential remains intact.
Over the long term, population growth, urbanisation, rising living standards,
and the infrastructure required for digitisation and decarbonisation are all
expected to drive demand for steel, non-ferrous metals and fertilisers. We
believe that China's economic transition could also accelerate its demand
shift increasingly towards 'future-facing commodities'.
For the review and outlook relating to our individual commodities please refer
to the relevant segment sections.
Costs and inflation
Inflationary pressures across our cost base have eased considerably from their
post-pandemic peaks. Headline consumer inflation in Australia has fallen from
a 7.8% peak in FY23 to currently being within the Reserve Bank of Australia's
2-3% target range, while in Chile, inflation is hovering just above the target
range. We have generally seen a similar easing in inflationary pressure across
most key categories of our cost base, but the path to normalisation has been
slow and bumpy for some. We also still expect some of the lagged effects of
inflation to continue to flow into our cost base for the remainder of FY25.
BHP | Financial results for the half year ended 31 December 2024
The labour market, which had been the most persistent inflationary concern,
appears to be easing, though conditions in our operating regions will vary in
the near-term. In Australia, wage growth has been moderating since it peaked
in the first half of FY24. In Chile, the path to labour cost normalisation was
disrupted due to the impact of higher electricity tariffs feeding through to
inflation-linked wage hikes in FY24. These cost pass-throughs should moderate
in the near-term.
Some raw materials that impact our cost base, such as ammonia and natural
rubber, also pushed higher in the first half of FY25 due to supply-side
issues, while electricity costs in Australia remained volatile. Meanwhile,
diesel prices continued to ease amidst expectations of global oversupply.
Overall, the cost of mining production continues to be higher than it was
prior to the pandemic. This implies that price support is also higher, and
low-cost operators stand to capture potentially higher relative margins in
certain commodities.
5
BHP | Financial results for the half year ended 31 December 2024
Segment and asset performance
Detailed financial information on all business segments in the Financial
performance summary (#_Financial_performance_summary1_3)
Copper
Production Commodity review and outlook
Copper prices in HY25 retreated from the recent peak in May 2024, but remained
987 kt Up 10% relatively elevated owing to tight fundamentals, China stimulus plans and US
interest rate cuts since September.
HY24 894 kt
Chinese copper demand exceeded expectations in CY24 as continued strength in
FY25e 1,845 - 2,045 kt power grid investment and consumer durables demand (e.g. air-conditioners and
electronics) offset the ongoing weakness in the real estate sector. Outside
China, soft manufacturing demand and slower than expected investment dragged
on local copper consumption.
Average realised price
In the near term, the copper market is expected to be broadly balanced.
US$3.99/lb Up 9% China's demand will continue to grow due to stimulus directed to power
infrastructure and consumer durables, and demand from growing electric vehicle
HY24 US$3.66/lb penetration should continue to be robust. While headwinds might persist in
Europe, we are more optimistic for demand growth in North America and India,
as well as Southeast Asia and the Middle East, where new fabricating capacity
is expected to ramp up.
Underlying EBITDA
Mine supply continues to grow modestly but is facing challenges, lagging
US$5.0 bn Up 44% overall demand. Copper concentrates balance is expected to remain very tight
and the industry will rely on rising copper scrap supply to help fill this gap
HY24 US$3.5 bn for the next couple of years. We note that global visible cathode inventories
are low compared to historical levels and there will be limited scope for
39% contribution to the Group's Underlying EBITDA inventories to rise. This could lead to critically low inventories in the
event of any mine supply disruptions in the latter part of this decade.
54% Underlying EBITDA margin
In the long run, we believe annual copper demand will grow from 32 Mtpa
currently to over 50 Mtpa by 2050, with the key drivers being 'Traditional'
economic growth (home building, electrical equipment and household
Underlying ROCE appliances), 'Energy Transition' (renewables and electric vehicles) and
'Digital' (Artificial Intelligence and Data Centres demand of 3 Mtpa by 2050).
13% We anticipate that the cost curve for the mines needed to meet this demand is
likely to steepen as both operational and development challenges progressively
HY24 10% increase. For future mine supply to be incentivised we think prices will need
to rise from levels seen in the first half of FY25 and be sufficiently high to
trigger investment.
Capital and exploration expenditure Segment outlook
After increasing copper production by 19% from FY22 to FY24, we delivered a
US$2.2 bn 10% increase in HY25, xii (#_edn12) including a 10-year production record at
Escondida as we mined higher grade ore, and further lifted productivity across
HY24 US$2.0 bn all copper-producing assets. In HY25, total copper Underlying EBITDA increased
to US$5.0 bn and its contribution to the Group's Underlying EBITDA increased
FY25e ~US$4.7 bn to 39% (HY24: 25%).
BHP | Financial results for the half year ended 31 December 2024
6
In Chile we have a strong pipeline of organic growth options with attractive
returns across our Escondida and Pampa Norte assets. At our Chilean copper
site tour
(https://www.bhp.com/investors/presentations-events/presentations-and-briefings)
in November 2024, we outlined seven key projects across both existing and new
facilities. These are competitive and capital efficient with an average
capital intensity of ~US$23,000/t, less than similar projects in the Americas
from our competitors at ~US$27,000/t. Final Investment Decisions (FIDs) across
these projects are planned between FY26 to FY29, subject to permitting.
Delivering these projects will potentially grow copper production to average
~1.4 Mtpa in Chile through the 2030s.
We are growing at our 100% owned Copper South Australia (Copper SA) asset,
with growth projects across all three operations. We are assessing the pathway
to deliver >500 ktpa of copper production in the early 2030s (>700 ktpa
CuEq), and a strategy to deliver up to 650 ktpa copper production by the
middle of next decade.(( xiii (#_edn13) )) This is supported by the recent
exploration success at OD Deeps and at Oak Dam.
In Peru, we hold a 33.75% share in Antamina, a top ten global copper
producer. xiv (#_edn14) Antamina is expected to produce between 115 - 130
ktpa in FY25, and recently received environmental approval to continue mining
to 2036 (from 2028).
BHP Canada and Lundin Mining have also formed the Canadian-incorporated joint
venture company, Vicuña, to hold the combined FDS and Josemaria copper
projects located in the Vicuña district of Argentina and Chile. BHP's total
cash completion payment for the transaction was US$2.0 bn, paid in January
2025.
We also have a 45% interest in the Resolution Copper Project in the United
States, one of the largest undeveloped copper projects in the world with the
potential to become a significant copper producer in North America.
As part of our aspiration, we estimate that these projects could potentially
deliver over 2 Mtpa of attributable copper production by the mid-2030s. xv
(#_edn15)
7
BHP | Financial results for the half year ended 31 December 2024
Escondida
Copper production Unit cost(1,2) Underlying EBITDA
644 kt Up 22% US$1.33/lb Down 12% US$3.5 bn Up 48%
HY24 528 kt HY24 US$1.51/lb HY24 US$2.3 bn
FY25e 1,180 - 1,300 kt FY25e US$1.30 - US$1.60/lb
Medium-term(3) 900 - 1,000 ktpa Medium-term(3) US$1.50 - US$1.80/lb
1 Based on exchange rates of: HY25 USD/CLP 947 (realised); HY24
USD/CLP 874 (realised); FY25 and medium-term USD/CLP 842 (guidance).
2 Refer to Non-IFRS information (#_Unit_costs) for detailed unit cost
reconciliation.
3 Medium-term refers to an average for a period from FY27 onwards.
Financial performance
Underlying EBITDA increased 48% primarily as a result of:
· Increased sales volumes in line with higher concentrator feed grade
and higher recovery due to mine sequencing, which had a favourable impact of
US$0.7 bn; and
· Higher realised copper prices, which had a favourable impact of
US$0.5 bn.
These were partially offset by the impacts of one-off labour related costs and
operating costs for additional fleet to deliver on the mine plan. Overall
Escondida unit cost performance was strong, delivering a 12% reduction in
controllable costs, which exclude inflation, foreign exchange and price linked
costs.
Asset outlook
Production for FY25 remains unchanged between 1,180 and 1,300 kt. Production
for FY25 and FY26 is expected to average between 1,200 and 1,300 ktpa. From
FY27 production is expected to decline to between 900 and 1,000 ktpa on
average for a period as a result of lower concentrator feed grades.
Concentrator feed grade for FY25 is expected to remain greater than 0.90% and
decline to below 0.80% from FY27.
The Escondida growth program continues to advance. On the Chilean site tour,
we presented four growth options to offset the impacts of falling concentrator
feed grade, including:
· The potential expansion and debottlenecking at the Laguna Seca
concentrators to increase throughput and improve recovery using Hydrofloat
technology;
· The Los Colorados concentrator life extension with the potential to
continue production through to FY29;
· A new concentrator to replace the ageing Los Colorados facility
with construction planned to commence in FY29; and
· The application of new technologies to leach spent primary sulphide
ores and improve recoveries.
At a program level the expected IRRs are attractive at between 15% and 19% at
consensus prices, with competitive capital intensities between US$19,000 and
US$26,000/t CuEq.
Full SaL, a BHP designed leaching technology which has already been
successfully deployed at Spence, remains on track for first production during
FY25. We expect it to produce ~410 kt in copper cathodes at Escondida over a
10-year period once implemented through improved recoveries and shorter leach
cycle times.
In the Escondida Norte pit, we achieved the first month of full autonomous
haulage in December 2024 with 20 trucks operating. We will continue to ramp up
its hauling fleet to ~50 autonomous trucks over the next three years.
Escondida continues to evaluate transitioning its entire fleet of conventional
haul trucks to autonomous operations over the next decade.
8
BHP | Financial results for the half year ended 31 December 2024
Pampa Norte
Copper production(1,2) Spence unit cost(2,3,4) Underlying EBITDA
126 kt Down 9% US$2.01/lb Up 1% US$0.5 bn Up 34%
HY24 138 kt HY24 US$1.98/lb HY24 US$0.4 bn
FY25e 240 - 270 kt FY25e US$2.00 - US$2.30/lb
Medium-term ~250 ktpa Medium-term US$2.05 - US$2.35/lb
1 HY25 production is for Spence only. HY24 includes 11 kt from Cerro
Colorado which entered temporary care and maintenance in December 2023.
Excluding these volumes, HY25 production decreased 1%. Medium-term guidance
refers to an average of 250 ktpa over five years on the basis that remediation
of the previously identified TSF anomalies does not impact operations.
2 FY25 and medium-term production and unit cost guidance is provided
for Spence only.
3 Refer to Non-IFRS information (#_Unit_costs) for detailed unit cost
reconciliation.
4 Based on exchange rates of: HY25 USD/CLP 947 (realised); HY24
USD/CLP 874 (realised); FY25 and medium-term USD/CLP 842 (guidance).
Financial performance
Underlying EBITDA increased 34% predominately due to higher realised copper
prices.
Unit costs were broadly flat as we managed the impact of general inflation and
lower capitalisation of mine development costs in line with the mine plan.
Asset outlook
Production at Spence for FY25 is expected to be between 240 and 270 kt and the
concentrator plant modifications completed in June 2024 are continuing to
deliver expected improvements in throughput and recovery.
Production is expected to average ~250 ktpa over the next five years.
On the Chilean site tour, we presented two future growth options at Spence:
· An option for the implementation of Simple Approach to Leaching 2
(SaL2), BHP's patented technology, at the sulphide leach pad, which would
enable processing of transitional and hypogene ores. The ability to leach
low-grade ores would allow us to prioritise higher grades at the concentrator
and potentially extend cathode life from FY28 to FY31 at an average of ~60
ktpa of production; and
· Two avenues to expand and debottleneck the Spence concentrator to
further lift throughput and recoveries which could potentially increase
production by 10 - 15 ktpa.
Cerro Colorado entered temporary care and maintenance in December 2023 and we
are studying the application of BHP's SaL1 leaching technology to potentially
restart operations in the future.
9
BHP | Financial results for the half year ended 31 December 2024
Copper South Australia
Copper production Unit cost(1,2) Underlying EBITDA
145 kt Down 6% US$1.57/lb Down 5% US$0.7 bn Up 26%
HY24 154 kt HY24 US$1.65/lb HY24 US$0.6 bn
FY25e 300 - 325 kt FY25e US$1.30 - US$1.80/lb
1 Based on exchange rates of: HY25 AUD/USD 0.66 (realised); HY24
AUD/USD 0.65 (realised); FY25 AUD/USD 0.66 (guidance); and prices for
by-products of: FY25 gold US$2,000/oz, and uranium US$80/lb (guidance).
2 Refer to Non-IFRS information (#_Unit_costs) for detailed unit cost
reconciliation.
Financial performance
Underlying EBITDA increased predominantly as a result of higher average
realised prices for copper, uranium, gold and silver, which had a favourable
impact of US$0.3 bn.
This was partially offset by the impacts of a two-week weather-related power outage and subsequent two-week ramp up period which resulted in lower production. Inventory drawdowns to maintain sales commitments during this period also resulted in higher operating costs.
Asset outlook
Production for FY25 is expected to be between 300 and 325 kt, with strong
performance across the asset in December of 30kt. This is an indication of a
stable ramp up after the weather-related power outage and reflects the strong
underlying performance at Copper South Australia following a number of years
of investment in asset integrity, and the successful integration of the
Prominent Hill and Carrapateena assets.
We are executing growth and exploration projects, such as:
· At Prominent Hill, the Prominent Hill Operation Expansion (PHOX)
project has progressed with shaft sinking now ~70% complete, the head frame
installed and site infrastructure upgraded, with 90% of work packages awarded.
The project is now forecast to come online in H2 FY27 (previously FY26) for a
total investment of US$912 m (previously US$673 m). Revisions to schedule and
investment amount are primarily due to lower than planned initial shaft sink
rates, provision for additional ground support due to seismic activity at
depth and the tendering of major work packages. The Wira shaft hoisting system
is expected to extend the mine life to at least 2040 (previously 2036).
· At Carrapateena, the commissioning of Crusher 2 has supported
higher productivity from the sub-level cave and we continue to invest in
processing plant capacity to enable an uplift in throughput to 7 Mtpa of mined
ore. The Block Cave Expansion project is progressing via underground
development of the access and conveyor decline below the existing sub-level
cave. The project is expected to extend the mine life beyond the existing
sub-level cave and increase throughput at Carrapateena up to 12 Mtpa, ramping
up from FY29.
· At Olympic Dam, we have approved ~US$200 m of investment in
underground development that will enable a new surface access decline. The
Southern Mining Area Decline (SMAD) will unlock up to 2.5 Mtpa of additional
vertical capacity and support future mine expansion options, with completion
expected in FY28.
· At Oak Dam, exploration activity peaked at 13 active drill rigs
during the period (10 now active). We are seeking approvals to begin execution
activities on an underground access decline.
We are assessing the optimal pathway for a Smelter and Refinery Expansion
(SRE) at Olympic Dam.xiii We expect the SRE will proceed in two phases. The
first phase is planned for FID in HY27 and would involve a transition to a
two-stage smelter configuration with concentrate smelting capacity between
1,100 to 1,400 ktpa which is better suited to the asset mineralogy. This would
enable us to unlock ~US$1.5 bn of total synergies from the OZL acquisition.
The second phase of the expansion would increase capacity to align with
potential further growth from Oak Dam and Olympic Dam.
10
BHP | Financial results for the half year ended 31 December 2024
Iron ore
Production Commodity review and outlook
Iron ore benchmark prices traded around the US$100/t level in HY25. Global
131 Mt Up 1% seaborne iron ore demand fell in CY24, with a marginal decrease in China and
developed Asia not offset by growth from developing Asia and Europe. Chinese
HY24 129 Mt steel production remained resilient in CY24, with solid growth from
infrastructure investment, capital goods related to the energy transition and
FY25e 255 - 265.5 Mt steel exports offsetting weakness in the property sector. Chinese pig iron
output was less resilient than overall steel output, as scrap-based steel
production recovered. As a result, seaborne supply outpaced demand with the
combined annual shipments from leading producers expected to have hit record
Average realised price (WAIO) levels in CY24. This has kept Chinese port stocks at elevated levels over the
past six months.
US$81.11/wmt Down 22%
In the near term, global seaborne demand is expected to remain in a plateau
HY24 US$103.7/wmt phase with marginal declines from China mostly balanced by growth in
developing Asia. Supply growth from major producers is anticipated to continue
in the coming years. New iron ore projects in Africa and potentially some mine
restarts are expected bring further supply pressures from 2026.
Underlying EBITDA
Our estimate of cost support continues to sit in the US$80 - US$100/t range on
US$7.2 bn Down 26% a 62% Fe CFR basis, formed by approximately 180 Mt of higher cost supply,
mainly from Australian junior miners, Indian fines and some Chinese domestic
HY24 US$9.7 bn mines. Over three-quarters of this supply has costs above US$90/t. Export
volumes of price-sensitive Indian fines almost halved year-on-year over HY25.
56% contribution to the Group's Underlying EBITDA As the market turns more competitive, some additional high-cost suppliers may
leave the market in the coming years.
63% Underlying EBITDA margin
We maintain our view that China's steel production is likely to have plateaued
around the 1 Bt level until the late 2020s. However, its pig iron production
is expected to decline with more recycled scrap used in steelmaking. In the
Underlying ROCE (WAIO) long run, seaborne iron ore trade is likely to diversify gradually as demand
grows from other developing regions. Traditional supply basins might require
44% more investments to sustain production in the face of grade decline and
resource depletion.
HY24 62%
Segment outlook
We remain the lowest cost major iron ore producer globally and are focused on
maintaining our industry leading cost position at WAIO.
Capital and exploration expenditure (WAIO) We plan to increase production to >305 Mtpa (100% basis) at WAIO over the
medium-term, underpinned by the Port Debottlenecking Project 1 (PDP1) which
US$1.4 bn was delivered in CY24 and enabled record first-half tonnes shipped from the
port, as well as the Rail Technology Programme (RTP1).
HY24 US$1.0 bn
We are assessing options to grow our WAIO production up to 330 Mtpa (100%
FY25e ~US$2.5 bn basis) if market conditions warrant, including studying optimal mine and
infrastructure configurations and potentially increasing ore beneficiation. We
expect to complete these studies in CY25.
In Brazil, Samarco is set to double production capacity following the restart
and ramp up of a second concentrator, helping to support the local community
through jobs, investment and taxes.
11
BHP | Financial results for the half year ended 31 December 2024
Western Australia Iron Ore
Iron ore production Unit cost(1,2) Underlying EBITDA
128 Mt Up 1% US$18.19/t Down 1% US$7.1 bn Down 26%
C1 US$17.50/t(3)
HY24 126 Mt HY24 US$18.46/t HY24 US$9.6 bn
FY25e 282 - 294 Mt (100% basis) FY25e US$18.00 - US$19.50/t
Medium-term >305 Mtpa (100% basis) Medium-term 305 Mtpa (100% basis)
and reduce unit costs to 1.0%
copper.
In January 2025, we completed the formation of Vicuña, a 50/50 joint venture
with Lundin Mining. BHP's total cash payment for the transaction was US$2.0
bn.
Vicuña is a long-term strategic alliance between BHP and Lundin Mining to
develop the combined FDS and Josemaria projects through an integrated project
plan. The proximity of FDS and Josemaria allows for greater economies of scale
and increased optionality for staged expansions, as well as the incorporation
of future exploration as the development matures.
Vicuña expects to spend US$312 m (100% basis) in CY25, with activities
focused on project studies and mine planning, exploration drilling and access
road construction.
Drilling is currently underway at FDS and Cumbre Verde and will continue
throughout the year. The drill program at FDS will focus on resource growth
with multiple step-out targets in all directions from zones of known
mineralization, including both the Bonita and Aurora Zones along with infill
drilling to support an initial sulphide mineral resource estimate. Drilling at
Cumbre Verde will follow up on the initial results from last year and target
the same mineralized system and structures discovered to the north of the
project.
The advancement of Vicuña aims to line up with the application window of the
Incentive Regime for Large Investments ("RIGI") in Argentina. The incentive
regime provides a clear fiscal stability framework for the overall operation
during the initial construction period and future phased expansions.
We also continued to progress greenfield exploration activities in Australia,
Canada, Chile, Peru, Serbia, Sweden and the United States.
The 2025 cohort of BHP's Xplor program has been announced, with eight
applicants selected for the program. The geographically diverse participants
have a strong focus on copper, and were chosen based on the high quality of
their exploration programs, strong leadership, and innovative approaches to
leveraging leading-edge technologies and data.
19
BHP | Financial results for the half year ended 31 December 2024
Appendix 1
Financial Report (#_Financial_Report) for the half year ended 31 December 2024
Financial performance summary(1)
A summary of performance for HY25 and HY24 is presented below.
Key group metrics
Half year ended 31 December HY25 HY24 Change
US$M US$M %
Revenue 25,176 27,232 (8%)
Profit from operations 9,126 4,803 90%
Attributable profit 4,416 927 376%
Basic earnings per share (cents) 87.1 18.3 376%
Interim dividend per share (cents) 50 72 (31%)
Net operating cash flow 8,317 8,884 (6%)
Capital and exploration expenditure 5,205 4,744 10%
Net debt 11,793 12,648 (7%)
Underlying EBITDA 12,362 13,875 (11%)
Underlying attributable profit 5,082 6,569 (23%)
Underlying basic earnings per ordinary share (cents) 100.2 129.6 (23%)
Key asset metrics
Half year ended Revenue(2) Underlying Underlying Exceptional Net Capital Exploration Exploration
31 December 2024 EBITDA(3) EBIT(3) items(4) operating expenditure gross to profit
US$M assets(3)
Copper
Escondida 5,828 3,468 2,984 13,102 1,168
Pampa Norte(5) 1,254 545 260 4,860 338
Antamina(6) 841 532 412 1,529 246
Copper South Australia(7) 2,083 742 407 16,804 598
Other(6) 70 (75) (99) 482 64
Total Copper from Group production 10,076 5,212 3,964 − 36,777 2,414
Third-party products 1,030 69 69 − − −
Total Copper 11,106 5,281 4,033 − 36,777 2,414 77 77
Adjustment for equity accounted investments(6) (841) (270) (150) − − (246) (1) (1)
Total Copper statutory result 10,265 5,011 3,883 − 36,777 2,168 76 76
Iron Ore
Western Australia Iron Ore 11,430 7,140 6,161 21,531 1,369
Samarco(8) − − − (6,259) −
Other 64 45 33 (168) 7
Total Iron Ore from Group production 11,494 7,185 6,194 (162) 15,104 1,376
Third-party products 14 2 2 − − −
Total Iron Ore 11,508 7,187 6,196 (162) 15,104 1,376 58 38
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 11,508 7,187 6,196 (162) 15,104 1,376 58 38
Coal
BHP Mitsubishi Alliance 1,853 391 167 6,791 214
New South Wales Energy Coal(10) 1,027 213 163 (145) 61
Other − 10 (6) 21 6
Total Coal from Group production 2,880 614 324 − 6,667 281
Third-party products − − − − − −
Total Coal 2,880 614 324 − 6,667 281 7 2
Adjustment for equity accounted investments(10) (74) (47) (35) − − − − −
Total Coal statutory result 2,806 567 289 − 6,667 281 7 2
Group and unallocated items
Potash − (133) (134) 7,475 940 − −
Western Australia Nickel(11) 592 (303) (303) (75) 176 17 17
Other(12) 5 33 (251) (1,805) 65 41 41
Total Group and unallocated items 597 (403) (688) (392) 5,595 1,181 58 58
Inter-segment adjustment − − − − − − − −
Total Group 25,176 12,362 9,680 (554) 64,143 5,006 199 174
20
BHP | Financial results for the half year ended 31 December 2024
Half year ended Revenue(2) Underlying Underlying Exceptional Net Capital Exploration Exploration
31 December 2023 EBITDA(3) EBIT(3) items(4) operating expenditure gross to profit
US$M assets(3)
Copper
Escondida 4,427 2,347 1,897 12,737 853
Pampa Norte(5) 1,133 408 199 4,740 392
Antamina(6) 730 469 364 1,454 258
Copper South Australia(7) 1,853 591 232 16,061 581
Other(6) 22 (107) (141) 322 68
Total Copper from Group production 8,165 3,708 2,551 − 35,314 2,152
Third-party products 1,223 28 28 − − −
Total Copper 9,388 3,736 2,579 − 35,314 2,152 89 89
Adjustment for equity accounted investments(6) (730) (263) (141) − − (258) (1) (1)
Total Copper statutory result 8,658 3,473 2,438 − 35,314 1,894 88 88
Iron Ore
Western Australia Iron Ore 13,991 9,646 8,679 20,937 927
Samarco(8) − − − (6,272) −
Other 59 21 9 (127) −
Total Iron Ore from Group production 14,050 9,667 8,688 (2,899) 14,538 927
Third-party products 12 (1) (1) − − −
Total Iron Ore 14,062 9,666 8,687 (2,899) 14,538 927 44 22
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 14,062 9,666 8,687 (2,899) 14,538 927 44 22
Coal
BHP Mitsubishi Alliance(9) 2,882 810 529 6,863 303
New South Wales Energy Coal(10) 980 257 216 (144) 43
Other − (31) (44) (27) 6
Total Coal from Group production 3,862 1,036 701 − 6,692 352
Third-party products − − − − − −
Total Coal 3,862 1,036 701 − 6,692 352 7 2
Adjustment for equity accounted investments(10) (76) (61) (49) − − − − −
Total Coal statutory result 3,786 975 652 − 6,692 352 7 2
Group and unallocated items
Potash − (129) (130) 5,247 533 1 1
Western Australia Nickel(11) 725 (174) (240) (311) 780 27 25
Other(12) 1 64 (174) (666) 59 32 32
Total Group and unallocated items 726 (239) (544) (3,531) 4,270 1,372 60 58
Inter-segment adjustment − − − − − − − −
Total Group 27,232 13,875 11,233 (6,430) 60,814 4,545 199 170
1 Group profit before taxation comprised Underlying EBITDA,
exceptional items, depreciation, amortisation and net impairments of US$3,236
m (HY24: US$9,072 m) and net finance costs of US$457 m (HY24: US$821 m).
2 Total revenue from thermal coal sales, including BMA and NSWEC, was
US$955 m (HY24: US$980 m).
3 For more information on the reconciliation of non-IFRS financial
information to our statutory measures, reasons for usefulness and calculation
methodology, please refer to non-IFRS financial information
(#_Non-IFRS_Financial_Invormation) .
4 Excludes exceptional items relating to Net finance costs US$208 m
and Income tax benefit US$96 m (HY24: Net finance costs US$190 m and Income
tax benefit US$978 m).
5 Includes Spence and Cerro Colorado. Cerro Colorado entered
temporary care and maintenance in December 2023.
6 Antamina, SolGold and Resolution (the latter two included in Other)
are equity accounted investments and their financial information presented
above with the exception of net operating assets reflects BHP Group's share.
Group and Copper level information is reported on a statutory basis which
reflects the application of the equity accounting method in preparing the
Group financial statements - in accordance with IFRS. Underlying EBITDA of the
Group and the Copper segment, includes D&A, net finance costs and taxation
expense of US$270 m (HY24: US$263 m) related to equity accounted investments.
7 Includes Olympic Dam, Prominent Hill and Carrapateena.
8 Samarco is an equity accounted investment and its financial
information presented above, with the exception of net operating assets,
reflects BHP Billiton Brasil Ltda's share. All financial impacts following the
Samarco dam failure have been reported as exceptional items in both reporting
periods.
9 On 2 April 2024 BHP and Mitsubishi Development Pty Ltd (MDP)
completed the divestment of the Blackwater and Daunia mines (which were part
of the BHP Mitsubishi Alliance (BMA) to Whitehaven Coal). The Group's share of
Revenue, Underlying EBITDA, D&A, Underlying EBIT and Capital expenditure
is included within 'BHP Mitsubishi Alliance' in comparative periods.
Blackwater and Daunia assets and liabilities were classified as 'Held For
Sale' at 31 December 2023 and were therefore excluded from Net Operating
Assets at 31 December 2023.
10 Includes NCIG which is an equity accounted investment and its
financial information presented above, with the exception of net operating
assets, reflects BHP Group's share. Total Coal statutory result excludes
contribution related to NCIG until future profits exceed accumulated losses.
11 Western Australia Nickel is comprised of the Nickel West operations
and the West Musgrave project, both of which transitioned into temporary
suspension in the period ending December 2024.
12 Other includes functions, other unallocated operations including
legacy assets and consolidation adjustments. Revenue not attributable to
reportable segments comprises the sale of freight and fuel to third parties,
as well as revenues from unallocated operations. Exploration and technology
activities are recognised within relevant segments.
21
BHP | Financial results for the half year ended 31 December 2024
Underlying EBITDA waterfall
The following table and commentary describes the impact of the principal
factorsiii that affected Underlying EBITDA for HY25 compared with HY24:
US$M Total Group Copper Iron ore Coal Group and unallocated
Half year ended 31 December 2023 13,875 3,473 9,666 975 (239)
Net price impact (1,935) 937 (2,477) (395) -
Change in sales prices (2,430) 997 (2,746) (681) -
Price linked costs 495 (60) 269 286 -
Escondida: New royalty regime introduced in January 2024. WAIO: Lower royalties in line with lower prices. BMA: Lower royalties in line with lower prices.
Changes in volumes 1,109 749 71 289 -
Escondida: Higher volumes due to higher concentrator feed grade of 1.03% WAIO: Increased capacity unlocked by the Port Debottlenecking Project (PDP1), BMA: Improved strip ratios and increased prime stripping as a result of an
(HY24: 0.81%), and higher recoveries as mining progressed into areas of higher higher volumes delivered from the Central Pilbara hub (South Flank and Mining uplift in truck productivity, partially offset by slower production rates at
grade ore as planned. This was partially offset by planned lower cathode Area C) following the completion of the ramp up of South Flank in HY24, Broadmeadow following the longwall move due to geotechnical characteristics as
production as the integration of the Full SaL project continued. partially offset by the planned increase in tie-in activity of the Rail well as the planned increase in raw coal inventory to improve the stability of
Technology Programme 1 (RTP1) and wet weather in December 24. the value chain.
Spence: Higher volumes due to timing of shipments.
Copper SA: Lower volumes due to weather-related power outage at OD, partially
offset by inventory drawdown.
Change in controllable cash costs (590) (291) (53) (129) (117)
Operating cash costs (580) (284) (45) (129) (122)
Escondida: Primarily one-off labour related costs, combined with higher WAIO: Additional planned shutdown activity, partially offset by favourable BMA: Increased stripping enabled by improved truck productivity. G&U: Higher costs associated with studies & various improvement
operational and maintenance contractor costs to support higher material moved. inventory movements.
projects.
NSWEC: Inventory drawdowns to offset the impacts of reduced truck availability
Copper SA: Finished goods inventory drawdown. and unfavourable weather conditions.
Exploration and business development (10) (7) (8) - 5
Change in other costs 178 88 70 29 (9)
Exchange rates 380 142 153 69 16
Inflation on costs (335) (174) (74) (62) (25)
Inflation rate of 3.4% for Australia and 4.3% for Chile
Fuel, energy, and consumable price movements 67 30 15 22 -
Escondida, Spence and Copper SA: Primarily due to lower diesel prices, WAIO: Primarily due to lower diesel prices. BMA & NSWEC: Primarily due to lower diesel prices.
partially offset by higher electricity prices.
Non-Cash 66 90 (24) - -
Escondida: Higher stripping capitalisation reflecting phase of mine plan.
Change in other (275) 55 (90) (202) (38)
Asset sales (17) - 1 17 (35)
Ceased and sold operations (353) (1) - (226) (126)
BMA: Contribution of Blackwater and Daunia before sale in April 2024. WAN: Operations transitioned into temporary suspension in December 2024 as
planned.
Other 95 56 (91) 7 123
Antamina: Higher profit driven by higher copper prices. WAIO: Higher freight and distribution costs due to higher freight rate. G&U: Higher recovery of freight costs caused by movements in the freight
index on continuous voyage charter (CVC) voyages.
Half year ended 31 December 2024 12,362 5,011 7,187 567 (403)
22
BHP | Financial results for the half year ended 31 December 2024
Exchange rates
The following exchange rates relative to the US dollar have been applied in
the financial information:
As at As at As at
Average Average 31 December 31 December 30 June
HY25 HY24 2024 2023 2024
Australian dollar(1) 0.66 0.65 0.62 0.68 0.67
Chilean peso 947 874 996 877 944
1 Displayed as US$ to A$1 based on common convention.
Capital and exploration expenditure
Historical capital and exploration expenditure and guidance are summarised
below:
FY25e HY25 HY24 FY24
US$M US$M US$M US$M
Maintenance and decarbonisation(1) 3.0 1,357 1,350 2,956
Development - Minerals 6.5 3,649 3,195 5,860
Capital expenditure (purchases of property, plant and equipment) 9.5 5,006 4,545 8,816
Add: exploration expenditure 0.5 199 199 457
Capital and exploration expenditure ~10.0 5,205 4,744 9,273
1 Maintenance capital includes non-discretionary spend for the
following purposes: deferred development and production stripping; risk
reduction; compliance and asset integrity. Includes capitalised deferred
stripping of US$517 m for HY25 (HY24: US$441 m) and US$1.1 bn estimated for
FY25.
Major Projects
Commodity Project and ownership Project scope / capacity Capital First Progress
expenditure
production
US$M
target date
Potash Jansen Stage 1 Design, engineering and construction of an underground potash mine and surface 5,723 End-CY26 Project is 63% complete
(Canada) infrastructure, with capacity to produce 4.15 Mtpa.
100%
Potash Jansen Stage 2 Development of additional mining districts, completion of the second shaft 4,859 FY29 Project is 6% complete
(Canada) hoist infrastructure, expansion of processing facilities and addition of rail
100% cars to facilitate production of an incremental 4.36 Mtpa.
Production and unit cost guidance
Historical production and production guidance are summarised below:
Production Medium-term guidance FY25 guidance HY25 HY24 HY25 vs HY24
Copper (kt) 1,845 - 2,045 987.0 894.4 10%
Escondida (kt) 900 - 1,000(1) 1,180 - 1,300 Unchanged 644.0 527.9 22%
Pampa Norte (kt)(2) ~250 240 - 270 Unchanged 126.3 138.1 (9%)
Copper South Australia (kt) 300 - 325 Lowered 144.6 153.7 (6%)
Antamina (kt) 115 - 135 Unchanged 66.8 71.7 (7%)
Carajás (kt) - - 5.3 3.0 77%
Iron ore (Mt) 255 - 265.5 130.9 129.0 1%
WAIO (Mt) 250 - 260 Original(3) 128.1 126.5 1%
WAIO (100% basis) (Mt) >305 282 - 294 Original(3) 144.7 142.1 2%
Samarco (Mt) 5 - 5.5 Upper half 2.8 2.5 9%
Steelmaking coal - BMA (Mt) 21.5 - 22.5 16.5 - 19 8.9 11.3 (21%)
BMA (100% basis) (Mt) 43 - 45 33 - 38 Upper half 17.9 22.6 (21%)
Energy coal - NSWEC (Mt) 13 - 15 Upper half 7.4 7.5 (1%)
Nickel - Western Australia Nickel (kt) - - 27.6 39.8 (31%)
1 Medium term refers to FY27 onwards. Production for FY25 and FY26 is
expected to average between 1,200 and 1,300 ktpa.
2 HY24 includes 11 kt from Cerro Colorado which entered temporary
care and maintenance in December 2023. Excluding these volumes, HY25
production decreased 1%. HY25 production and FY25 production guidance is for
Spence only. Medium-term guidance refers to an average of 250 ktpa over five
years on the basis that remediation of the previously identified TSF anomalies
does not impact operations.
23
BHP | Financial results for the half year ended 31 December 2024
3 In the Q2 FY25 Operational Review, WAIO production for FY25 was
expected to be in the 'upper half' of the range. Following the impact of
Tropical
Cyclone Zelia in February 2025, production is now no longer
expected to be in the upper half of the range.
Historical costs and cost guidance for our major assets are summarised below:
HY25 at
guidance realised HY25
Medium-term FY25 exchange exchange vs
Unit cost(1) guidance(2) guidance(2) rates(2) rates(3) HY24 HY24
Escondida unit cost (US$/lb)(4) 1.50 - 1.80 1.30 - 1.60 1.43 1.33 1.51 -12%
Spence unit cost (US$/lb) 2.05 - 2.35 2.00 - 2.30 2.15 2.01 1.98 1%
Copper SA unit cost (US$/lb) (5) 1.30 - 1.80 1.99 1.57 1.65 -5%
WAIO unit cost (US$/t)(6) <17.50 18.00 - 19.50 18.92 18.19 18.46 -1%
BMA unit cost (US$/t) <110 112 - 124 131.24 128.46 129.00 0%
1 Refer to Non-IFRS information (#_Unit_costs) for detailed unit cost
reconciliations and definitions.
2 FY25 and medium-term unit cost guidance are based on exchange
rates of AUD/USD 0.66 and USD/CLP 842.
3 Based on exchange rates of: HY25 AUD/USD 0.66 and USD/CLP 947
(realised); HY24 AUD/USD 0.65 and USD/CLP 874 (realised).
4 Escondida unit costs for FY24 onwards exclude revenue-based
government royalties. Medium-term refers to FY27 onwards.
5 FY25 unit cost guidance is based on prices for by-products of gold
US$2,000/oz and uranium US$80/lb.
6 The breakdown of C1 unit costs, excluding third party royalties,
are detailed on page (#_Western_Australia_Iron_4) 12
(#_Western_Australia_Iron_4) .
24
BHP | Financial results for the half year ended 31 December 2024
Health, safety and social value((
1 (#_ftn1)
))
Key safety indicators
Target/Goal HY25 FY24 HY24
Fatalities Zero work-related fatalities 0 1 0
High-potential injury (HPI) frequency(( 2 (#_ftn2) )) Year-on-year improvement in HPI frequency 0.06 0.11 0.09
Total recordable injury frequency (TRIF)(2) Year-on-year improvement in TRIF 4.3 4.8 4.6
Social value: key indicators scorecard
Target/Goal HY25 FY24 HY24
Operational GHG emissions Reduce operational GHG emissions by at least 30% from FY20 levels by FY30 4.5 9.2 4.7
(MtCO(2)-e)(( 3 (#_ftn3) ))
Value chain GHG emissions (Scope 3): Steelmaking: 2030 goal to support industry to develop steel production ✓ 140 ✓
technology capable of 30% lower GHG emissions intensity relative to
Committed funding in steelmaking partnerships and ventures to date (US$m) conventional blast furnace steelmaking, with widespread adoption expected
post-CY30.
Value chain GHG emissions: Maritime transportation: 2030 goal to support 40% GHG emissions intensity 44 42 43
reduction of BHP-chartered shipping of BHP products
Reduction in GHG emissions intensity of BHP-chartered shipping of our products
from CY08 (%)(( 4 (#_ftn4) ))
Social investment (US$m BHP equity share) Voluntary investment focused on the six pillars of our social value framework 37.4 136.7 36.1
Indigenous procurement spend (US$m) 5 (#_ftn5) Key metric for part of our 2030 Indigenous partnerships goal, to support the 452 609 289
delivery of mutually beneficial outcomes
Female employee participation(( 6 (#_ftn6) )) (%) Aspirational goal for gender balanced employee workforce(( 7 (#_ftn7) )) by 38.9 37.1 36.2(( 8 (#_ftn8) ))
the end of CY25
Indigenous employee participation(6,( 9 (#_ftn9) )) (%) Australia: aim to achieve 9.7% by the end of FY27 8.6 8.3 8.4(( 10 (#_ftn10) ))
Chile: aim to achieve 10.0% by the end of FY25 10.0 10.1 10.2
Canada: aim to achieve 20.0% by the end of FY26 10.4 11.2 9.4
Area under nature-positive management practices(( 11 (#_ftn11) )) (%) 2030 goal of having at least 30% of the land and water we steward(( 12 1.6 1.6 -
(#_ftn12) )) under conservation, restoration or regenerative practices
The Financial Report (#_Financial_Report) for the half year ended 31 December
2024 has been prepared on the basis of accounting policies and methods of
computation consistent with those applied in the 30 June 2024 financial
statements contained within the Annual Report of the Group. This news release
including the Financial Report is unaudited. Variance analysis relates to the
relative financial and/or production performance of BHP and/or its operations
during the December 2024 half year compared with the December 2023 half year,
unless otherwise noted. Medium term refers to a five-year horizon, unless
otherwise noted. Numbers presented may not add up precisely to the totals
provided due to rounding.
The following abbreviations may have been used throughout this release: silver
(Ag); gold (Au); billion tonnes (Bt); cost and freight (CFR); cost, insurance
and freight (CIF); carbon dioxide equivalent (CO2-e); copper (Cu); dry metric
tonne unit (dmtu); free on board (FOB); giga litres (GL); greenhouse gas
(GHG); grams per tonne (g/t); high-potential injury (HPI); kilograms per tonne
(kg/t); kilometre (km); million ounces per annum (Mozpa); million pounds
(Mlb); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); OZ
Minerals Ltd (OZL); pounds (lb); thousand ounces (koz); thousand ounces per
annum (kozpa); thousand tonnes (kt); thousand tonnes per annum (ktpa);
thousand tonnes per day (ktpd); sulphur (S); tonnes (t); total recordable
injury frequency (TRIF); uranium (U); uranium oxide (U(3)O(8)); and wet metric
tonnes (wmt).
Forward-looking statements
This release contains forward-looking statements, which involve risks and
uncertainties. Forward-looking statements include all statements, other than
statements of historical or present facts, including: statements regarding
trends in commodity prices and currency exchange rates; demand for
commodities; global market conditions, reserves and resources estimates;
development and production forecasts; guidance; expectations, plans,
strategies and objectives of management; climate scenarios; approval of
projects and consummation of transactions; closure, divestment, acquisition or
integration of certain assets, operations or facilities (including associated
costs or benefits); anticipated production or construction commencement dates;
capital costs and scheduling; operating costs and availability of materials
and skilled employees; anticipated productive lives of projects, mines and
facilities; the availability, implementation and adoption of new technologies,
including artificial intelligence; provisions and contingent liabilities; and
tax, legal and other regulatory developments.
Forward-looking statements may be identified by the use of terminology,
including, but not limited to, 'aim', 'ambition', 'anticipate', 'aspiration',
'believe', 'commit', 'continue', 'could', 'ensure', 'estimate', 'expect',
'forecast', 'goal', 'guidance', 'intend', 'likely', 'may', 'milestone',
'must', 'need', 'objective', 'outlook', 'pathways', 'plan', 'project',
'schedule', 'seek', 'should', 'strategy', 'target', 'trend', 'will', 'would',
or similar words. These statements discuss future expectations or performance,
or provide other forward-looking information.
Forward-looking statements are based on management's expectations and reflect
judgements, assumptions, estimates and other information available, as at the
date of this release. These statements do not represent guarantees or
predictions of future financial or operational performance, and involve known
and unknown risks, uncertainties and other factors, many of which are beyond
our control, and which may cause actual results to differ materially from
those expressed in the statements contained in this release. BHP cautions
against reliance on any forward-looking statements.
For example, our future revenues from our assets, projects or mines described
in this release will be based, in part, on the market price of the commodities
produced, which may vary significantly from current levels or those reflected
in our reserves and resources estimates. These variations, if materially
adverse, may affect the timing or the feasibility of the development of a
particular project, the expansion of certain facilities or mines, or the
continuation of existing assets.
Other factors that may affect our future operations and performance, including
the actual construction or production commencement dates, revenues, costs or
production output and anticipated lives of assets, mines or facilities include
our ability to profitably produce and deliver the products extracted to
applicable markets; the impact of economic and geopolitical factors, including
foreign currency exchange rates on the market prices of the commodities we
produce and competition in the markets in which we operate; activities of
government authorities in the countries where we sell our products and in the
countries where we are exploring or developing projects, facilities or mines,
including increases in taxes and royalties or implementation of trade or
export restrictions; changes in environmental and other regulations; political
or geopolitical uncertainty; labour unrest; weather, climate variability or
other manifestations of climate change; and other factors identified in the
risk factors discussed in OFR 8.1 in the Annual Report
(https://www.bhp.com/AR2024_OFR8-1) and BHP's filings with the U.S. Securities
and Exchange Commission (the 'SEC') (including in Annual Reports on Form 20-F)
which are available on the SEC's website at www.sec.gov (http://www.sec.gov) .
Except as required by applicable regulations or by law, BHP does not undertake
to publicly update or review any forward-looking statements, whether as a
result of new information or future events.
Past performance cannot be relied on as a guide to future performance.
Emissions data
Due to the inherent uncertainty and limitations in measuring greenhouse gas
(GHG) emissions under the calculation methodologies used in the preparation of
such data, all GHG emissions data or references to GHG emissions (including
ratios or percentages) in this release are estimates. Emissions calculation
and reporting methodologies may change or be progressively refined over time
resulting in the need to restate previously reported data. There may also be
differences in the manner that third parties calculate or report GHG emissions
compared to BHP, which means that third-party data may not be comparable to
our data. For information on how we calculate our GHG emissions, refer to the
BHP GHG Emissions Calculation Methodology 2024, available at bhp.com
(https://www.bhp.com) .
No offer of securities
Nothing in this release should be construed as either an offer, or a
solicitation of an offer, to buy or sell BHP securities in any jurisdiction,
or be treated or relied upon as a recommendation or advice by BHP.
Reliance on third party information
The views expressed in this release contain information that has been derived
from publicly available sources that have not been independently verified. No
representation or warranty is made as to the accuracy, completeness or
reliability of the information. This release should not be relied upon as a
recommendation or forecast by BHP.
No financial or investment advice - South Africa
BHP does not provide any financial or investment 'advice' as that term is
defined in the South African Financial Advisory and Intermediary Services Act,
37 of 2002, and we strongly recommend that you seek professional advice.
BHP and its subsidiaries
In this release, the terms 'BHP', the 'Company, the 'Group', 'BHP Group', 'our
business', 'organisation', 'we', 'us', 'our' and ourselves' refer to BHP Group
Limited and, except where the context otherwise requires, our subsidiaries.
Refer to Note 30 - Subsidiaries (https://www.bhp.com/AR2024_Note30) of the
Financial Statements in the Annual Report for a list of our significant
subsidiaries. Those terms do not include non-operated assets. Our non-operated
assets include Antamina, Samarco and Vicuña.
This release covers BHP's functions and assets (including those under
exploration, projects in development or execution phases, sites and operations
that are closed or in the closure phase) that have been wholly owned and
operated by BHP or that have been owned as a BHP-operated joint venture(1)
(referred to in this release as 'operated assets' or 'operations') during the
period from 1 July 2024 to 31 December 2024 unless otherwise stated.
BHP also holds interests in assets that are owned as a joint venture but not
operated by BHP (referred to in this release as 'non-operated joint ventures'
or 'non-operated assets'). Notwithstanding that this release may include
production, financial and other information from non-operated assets,
non-operated assets are not included in the BHP Group and, as a result,
statements regarding our operations, assets and values apply only to our
operated assets unless stated otherwise.
1 References in this release to a 'joint venture' are used for
convenience to collectively describe assets that are not wholly owned by BHP.
Such references are not intended to characterise the legal relationship
between the owners of the asset.
Certain sections of this release include data in relation to the Daunia and
Blackwater mines, which were divested in FY24. Data in relation to the Daunia
and Blackwater mines is shown for the period up to completion on 2 April 2024,
unless stated otherwise.
26
Authorised for lodgement by:
The Board of BHP Group Limited
Contacts
Media Investor Relations
media.relations@bhp.com (mailto:media.relations@bhp.com) investor.relations@bhp.com (mailto:investor.relations@bhp.com)
Australia and Asia Australia and Asia
Josie Brophy John-Paul Santamaria
Mobile: +61 417 622 839 +61 499 006 018
Europe, Middle East and Africa Europe, Middle East and Africa
Gabrielle Notley James Bell
Mobile: +61 411 071 715 +44 7961 636 432
North America Americas
Megan Hjulfors Monica Nettleton
Mobile: +1 403 605 2314 +1 416 518 6293
Latin America
Renata Fernandez
Mobile: +56 9 8229 5357
BHP Group Limited
ABN 49 004 028 077
LEI WZE1WSENV6JSZFK0JC28
Registered in Australia
Level 18, 171 Collins Street
Melbourne
Victoria 3000 Australia
Tel +61 1300 55 4757 Fax +61 3 9609 3015
BHP Group is headquartered in Australia
bhp.com
28
Financial Report
Financial Report
Half year ended
31 December 2024
29
BHP | Financial results for the half year ended 31 December 2024
Contents
Half Year Financial Statements
Page
Consolidated Income Statement for the half year ended 31 December 2024
31
Consolidated Statement of Comprehensive Income for the half year ended 31
December 2024
31
Consolidated Balance Sheet as at 31 December 2024
32
Consolidated Cash Flow Statement for the half year ended 31 December 2024
33
Consolidated Statement of Changes in Equity for the half year ended 31
December 2024
34
Notes to the Financial Statements
35
1. Basis of preparation
2. Exceptional items
3. Interests in associates and joint venture entities
4. Net finance costs
5. Income tax expense
6. Earnings per share
7. Dividends
8. Financial risk management - Fair values
9. Significant events - Samarco dam failure
10. Subsequent events
Directors' Report
51
Directors' Declaration of Responsibility
53
Auditor's Independence Declaration to the Directors of BHP Group Limited
54
Independent Review Report
55
30
BHP | Financial results for the half year ended 31 December 2024
Consolidated Income Statement for the half year ended 31 December 2024
Half year Half year Year
Notes ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Revenue 25,176 27,232 55,658
Other income 222 261 1,285
Expenses excluding net finance costs (16,367) (19,982) (36,750)
Profit/(loss) from equity accounted investments, related impairments and 3 95 (2,708) (2,656)
expenses
Profit from operations 9,126 4,803 17,537
Financial expenses (779) (1,164) (2,198)
Financial income 322 343 709
Net finance costs 4 (457) (821) (1,489)
Profit before taxation 8,669 3,982 16,048
Income tax expense (2,904) (2,215) (6,015)
Royalty-related taxation (net of income tax benefit) (480) (61) (432)
Total taxation expense 5 (3,384) (2,276) (6,447)
Profit after taxation 5,285 1,706 9,601
Attributable to non-controlling interests 869 779 1,704
Attributable to BHP shareholders 4,416 927 7,897
Basic earnings per ordinary share (cents) 6 87.1 18.3 155.8
Diluted earnings per ordinary share (cents) 6 86.9 18.3 155.5
The accompanying notes form part of this half year Financial Report.
Consolidated Statement of Comprehensive Income for the half year ended 31 December 2024
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Profit after taxation 5,285 1,706 9,601
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Hedges:
(Losses)/gains taken to equity (88) 114 (33)
Losses/(gains) transferred to the income statement 33 (92) 49
Tax recognised within other comprehensive income 16 (7) (5)
Total items that may be reclassified subsequently to the income statement (39) 15 11
Items that will not be reclassified to the income statement:
Re-measurement (losses)/gains on pension and medical schemes (6) 2 41
Equity investments held at fair value 17 (47) (30)
Tax recognised within other comprehensive income 1 − (13)
Total items that will not be reclassified to the income statement 12 (45) (2)
Total other comprehensive (loss)/income (27) (30) 9
Total comprehensive income 5,258 1,676 9,610
Attributable to non-controlling interests 869 779 1,708
Attributable to BHP shareholders 4,389 897 7,902
The accompanying notes form part of this half year Financial Report.
31
BHP | Financial results for the half year ended 31 December 2024
Consolidated Balance Sheet as at 31 December 2024
31 Dec 2024 30 June 2024
US$M US$M
ASSETS
Current assets
Cash and cash equivalents 9,560 12,501
Trade and other receivables 4,308 5,169
Other financial assets 533 381
Inventories 5,533 5,828
Current tax assets 728 314
Other 193 145
Total current assets 20,855 24,338
Non-current assets
Trade and other receivables 155 170
Other financial assets 1,230 1,229
Inventories 1,309 1,211
Property, plant and equipment 73,112 71,629
Intangible assets 1,761 1,718
Investments accounted for using the equity method 1,686 1,662
Deferred tax assets 61 67
Other 553 338
Total non-current assets 79,867 78,024
Total assets 100,722 102,362
LIABILITIES
Current liabilities
Trade and other payables 6,032 6,719
Interest bearing liabilities 491 2,084
Other financial liabilities 325 512
Current tax payable 1,048 884
Provisions 4,351 4,007
Deferred income 50 90
Total current liabilities 12,297 14,296
Non-current liabilities
Trade and other payables 33 45
Interest bearing liabilities 19,704 18,634
Other financial liabilities 1,971 1,759
Non-current tax payable 3 40
Deferred tax liabilities 3,537 3,332
Provisions 13,532 15,088
Deferred income 48 48
Total non-current liabilities 38,828 38,946
Total liabilities 51,125 53,242
Net assets 49,597 49,120
EQUITY
Share capital 4,964 4,899
Treasury shares (25) (36)
Reserves (35) (15)
Retained earnings 40,612 39,963
Total equity attributable to BHP shareholders 45,516 44,811
Non-controlling interests 4,081 4,309
Total equity 49,597 49,120
The accompanying notes form part of this half year Financial Report.
32
BHP | Financial results for the half year ended 31 December 2024
Consolidated Cash Flow Statement for the half year ended 31 December 2024
Notes Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Operating activities
Profit before taxation 8,669 3,982 16,048
Adjustments for:
Depreciation and amortisation expense 2,648 2,629 5,295
Net (reversal of impairment)/impairment of property, plant and equipment, (56) 3,513 3,890
financial assets and intangibles
Net finance costs 457 821 1,489
(Profit)/loss from equity accounted investments, related impairments and (95) 2,708 2,656
expenses
Other 325 290 (243)
Changes in assets and liabilities:
Trade and other receivables 576 (763) (290)
Inventories 197 (255) (530)
Trade and other payables (214) (33) (27)
Provisions and other assets and liabilities (733) (519) (469)
Cash generated from operations 11,774 12,373 27,819
Dividends received 233 199 397
Interest received 265 352 724
Interest paid (779) (800) (1,680)
Proceeds from cash management related instruments 261 311 361
Net income tax and royalty-related taxation refunded 95 175 547
Net income tax and royalty-related taxation paid (3,532) (3,726) (7,503)
Net operating cash flows 8,317 8,884 20,665
Investing activities
Purchases of property, plant and equipment (5,006) (4,545) (8,816)
Exploration and evaluation expenditure (199) (199) (457)
Exploration and evaluation expenditure expensed and included in operating cash 174 170 399
flows
Net investment and funding of equity accounted investments (679) (474) (701)
Proceeds from sale of assets 55 59 149
Proceeds from sale of subsidiaries, operations and joint operations, net of 285 55 1,072
their cash
Other investing (299) (145) (408)
Net investing cash flows (5,669) (5,079) (8,762)
Financing activities
Proceeds from interest bearing liabilities 1,150 4,991 5,091
Settlements of debt related instruments (147) − (321)
Repayment of interest bearing liabilities (1,311) (6,315) (7,327)
Distributions to non-controlling interests − − (13)
Dividends paid (3,865) (4,045) (7,675)
Dividends paid to non-controlling interests (1,097) (614) (1,424)
Net financing cash flows (5,270) (5,983) (11,669)
Net (decrease)/increase in cash and cash equivalents (2,622) (2,178) 234
Cash and cash equivalents, net of overdrafts, at the beginning of the period 12,498 12,423 12,423
Foreign currency exchange rate changes on cash and cash equivalents (317) 74 (159)
Cash and cash equivalents, net of overdrafts, at the end of the period 9,559 10,319 12,498
The accompanying notes form part of this half year Financial Report.
33
BHP | Financial results for the half year ended 31 December 2024
Consolidated Statement of Changes in Equity for the half year ended 31 December 2024
Attributable to BHP shareholders
US$M Share capital Treasury shares Reserves Retained Total equity Non- Total
earnings attributable controlling equity
to BHP interests
shareholders
Balance as at 1 July 2024 4,899 (36) (15) 39,963 44,811 4,309 49,120
Total comprehensive income − − (22) 4,411 4,389 869 5,258
Transactions with owners:
Shares issued(1) 65 (65) − − − − −
Employee share awards exercised net of employee contributions net of tax − 76 (63) (13) − − −
Accrued employee entitlement for unexercised awards net of tax − − 65 − 65 − 65
Dividends − − − (3,749) (3,749) (1,097) (4,846)
Balance as at 31 December 2024 4,964 (25) (35) 40,612 45,516 4,081 49,597
Balance as at 1 July 2023 4,737 (41) 13 39,787 44,496 4,034 48,530
Total comprehensive income − − (32) 929 897 779 1,676
Transactions with owners:
Shares issued(1) 82 (82) − − − − −
Employee share awards exercised net of employee contributions net of tax − 90 (71) (19) − − −
Accrued employee entitlement for unexercised awards net of tax − − 64 − 64 − 64
Dividends − − − (4,065) (4,065) (614) (4,679)
Balance as at 31 December 2023 4,819 (33) (26) 36,632 41,392 4,199 45,591
1 During the period, BHP Group Limited issued 2,370,371 fully paid
ordinary shares to the BHP Group Limited Employee Equity Trust and to Solium
Nominees (Australia) Pty Ltd at A$40.84 per share (31 December 2023: 2,919,231
fully paid ordinary shares at A$43.52 per share), to satisfy the vesting of
employee share awards and related dividend equivalent entitlements under those
employee share plans.
The accompanying notes form part of this half year Financial Report.
34
BHP | Financial results for the half year ended 31 December 2024
Notes to the Financial Statements
1. Basis of preparation
This general purpose Financial Report for the half year ended 31 December 2024
is unaudited and has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as issued by the International Accounting Standards Board
(IASB) and AASB 134 'Interim Financial Reporting' as issued by the Australian
Accounting Standards Board (AASB) and the Australian Corporations Act 2001 as
applicable to interim financial reporting. The general purpose Financial
Report for the half year ended 31 December 2024 does not include all of the
notes of the type normally included in an annual report. Accordingly, this
report should be read in conjunction with the annual consolidated Financial
Statements for the year ended 30 June 2024 and any public announcements made
by the Group in accordance with the continuous disclosure obligations of the
ASX Listing Rules.
Segment Reporting disclosures from IAS 34/AASB 134 'Interim Financial
Reporting' have been disclosed within the Financial performance summary on
pages 20 and 21 outside of this Financial Report.
The half year Financial Statements have been prepared on a basis of accounting
policies and methods of computation consistent with those applied in the 30
June 2024 annual consolidated Financial Statements contained within the Annual
Report of the Group, with the exception of new accounting standards that
became effective for the Group from 1 July 2024. The adoption of these new
accounting standards has not had a significant impact on the Group. A number
of accounting standards and interpretations have been issued and will be
applicable in future periods. These standards have not been applied in the
preparation of these half year Financial Statements.
All amounts are expressed in US dollars unless otherwise stated. The Group's
presentation currency and the functional currency of the majority of its
operations is US dollars as this is the principal currency of the economic
environment in which it operates. Amounts in this Financial Report have,
unless otherwise indicated, been rounded to the nearest million dollars.
The Directors have assessed the Group's ability to continue as a going concern
for the 12 months from the date of this report and consider it appropriate to
adopt the going concern basis of accounting in preparing the half year
Financial Statements.
2. Exceptional items
Exceptional items are those gains or losses where their nature, including the
expected frequency of the events giving rise to them, and impact is considered
material to the Financial Statements. Such items included within the Group's
profit for the half year are detailed below.
Half year ended 31 December 2024 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Samarco dam failure (442) − (442)
Western Australia Nickel (WAN) temporary suspension (320) 96 (224)
Total (762) 96 (666)
Attributable to non-controlling interests − − −
Attributable to BHP shareholders (762) 96 (666)
Samarco Mineração SA (Samarco) dam failure
The loss of US$442 million (after tax) relates to the Samarco dam failure,
which occurred in November 2015, and comprises the following:
Half year ended 31 December 2024 US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to (114)
the Samarco dam failure
Profit/(loss) from equity accounted investments, related impairments and
expenses:
Samarco dam failure provision 194
Fair value change on forward exchange derivatives (314)
Net finance costs (208)
Income tax expense −
Total(1) (442)
1 Refer to note 9 'Significant events - Samarco dam failure' for
further information.
35
BHP | Financial results for the half year ended 31 December 2024
Western Australia Nickel (WAN) temporary suspension
The Nickel West operations and the West Musgrave project at Western Australia
Nickel were transitioned into temporary suspension during the period in line
with the announcement on 11 July 2024.
The Group recognised costs of US$224 million (after tax) associated with the
transition of operations to temporary suspension. Pre-tax costs of US$320
million included US$410 million related to employee redundancies, contract
termination costs and inventory adjustments, offset by US$90 million
impairment reversals of certain non-current assets from Nickel West operations
to be redeployed to other operations within the Group.
The exceptional items relating to the half year ended 31 December 2023 and the
year ended 30 June 2024 are detailed below.
Half year ended 31 December 2023 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Samarco dam failure (3,120) (53) (3,173)
Impairment of Western Australia Nickel assets (3,500) 1,031 (2,469)
Total (6,620) 978 (5,642)
Attributable to non-controlling interests − − −
Attributable to BHP shareholders (6,620) 978 (5,642)
Year ended 30 June 2024 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Samarco dam failure (3,677) (85) (3,762)
Impairment of Western Australia Nickel assets (3,800) 1,125 (2,675)
Blackwater and Daunia gain on divestment 877 (203) 674
Total (6,600) 837 (5,763)
Attributable to non-controlling interests − − −
Attributable to BHP shareholders (6,600) 837 (5,763)
36
BHP | Financial results for the half year ended 31 December 2024
3. Interests in associates and joint venture entities
The Group's major shareholdings in associates and joint venture entities,
including their profit/(loss), are listed below:
Ownership interest at the Group's reporting date Profit/(loss) from equity accounted investments, related impairments and
expenses
31 Dec 31 Dec 30 June Half year ended Half year ended Year ended
2024 2023 2024 31 Dec 2024 31 Dec 2023 30 June 2024
% % % US$M US$M US$M
Share of profit/(loss) of equity accounted investments:
Compañia Minera Antamina SA 33.75 33.75 33.75 264 224 465
Samarco Mineração SA(1) 50.00 50.00 50.00 − − −
Other (49) (56) (89)
Share of profit of equity accounted investments 215 168 376
Samarco dam failure provision(1) 194 (2,982) (2,833)
Fair value change on forward exchange derivatives(1) (314) 106 (199)
Profit/(loss) from equity accounted investments, related impairments and 95 (2,708) (2,656)
expenses
1 Refer to note 9 'Significant events - Samarco dam failure' for
further information.
4. Net finance costs
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Financial expenses
Interest expense using the effective interest rate method:
Interest on bank loans, overdrafts and all other borrowings 667 764 1,467
Interest capitalised at 6.31% (31 December 2023: 6.79%; 30 June 2024: (287) (217) (530)
6.82%)(1)
Interest on lease liabilities 86 81 181
Discounting on provisions and other liabilities 457 479 1,064
Other gains and losses:
Fair value change on hedged loans (90) 345 (214)
Fair value change on hedging derivatives 17 (323) 188
Exchange variations on net debt (71) 35 27
Other − − 15
Total financial expenses 779 1,164 2,198
Financial income
Interest income (322) (343) (709)
Net finance costs 457 821 1,489
1 Interest has been capitalised at the rate of interest applicable to
the specific borrowings financing the assets under construction or, where
financed through general borrowings, at a capitalisation rate representing the
average interest rate on such borrowings.
37
BHP | Financial results for the half year ended 31 December 2024
5. Income tax expense
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Total taxation expense comprises:
Current tax expense 3,155 3,271 7,435
Deferred tax expense/(benefit) 229 (995) (988)
Total taxation expense 3,384 2,276 6,447
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Factors affecting income tax expense for the year
Income tax expense differs to the standard rate of corporation tax as follows:
Profit before taxation 8,669 3,982 16,048
Tax on profit at Australian prima facie tax rate of 30 per cent 2,601 1,195 4,814
Derecognition of deferred tax assets and current year tax losses 578 237 666
Tax on remitted and unremitted foreign earnings 154 96 224
Foreign exchange adjustments 48 (29) (79)
Amounts under/(over) provided in prior years 45 (8) (25)
Recognition of previously unrecognised tax assets (96) (73) (110)
Tax effect of profit/(loss) from equity accounted investments, related (123) 844 737
impairments and expenses(1)
Impact of tax rates applicable outside of Australia (505) (244) (556)
Other 202 197 344
Income tax expense 2,904 2,215 6,015
Royalty-related taxation (net of income tax benefit) 480 61 432
Total taxation expense 3,384 2,276 6,447
1 This item removes the prima facie tax effect on profit/(loss) from
equity accounted investments, related impairments and expenses that are net of
tax, with the exception of the Samarco forward exchange derivatives described
in note 9 'Significant events - Samarco dam failure', which are taxable.
International Tax Reform - Pillar Two Model Rules
The Organisation for Economic Co-operation and Development (OECD)/G20
Inclusive Framework on Base Erosion and Profit Shifting previously published
the Pillar Two model rules designed to address the tax challenges arising from
the digitalisation of the global economy, including the implementation of a
global minimum tax. The Group has a presence in jurisdictions that have
enacted or substantively enacted legislation in relation to the OECD/G20 BEPS
Pillar Two model rules, including Australia, where its ultimate parent entity
is tax resident. This effectively brings all jurisdictions in which the Group
has a presence into the scope of the rules.
The Group's current tax expense related to Pillar Two income taxes is US$1
million for the period ended 31 December 2024. The temporary exception to
recognising and disclosing information about deferred tax assets and
liabilities related to Pillar Two income taxes has been applied at 31 December
2024.
The Group continues to monitor and evaluate the domestic implementation of the
Pillar Two rules in the jurisdictions in which it operates. The implementation
of legislation that is enacted or substantively enacted but not yet in effect
is not expected to have a material impact on the Group's global effective tax
rate.
38
BHP | Financial results for the half year ended 31 December 2024
6. Earnings per share
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Earnings attributable to BHP shareholders (US$M)(1) 4,416 927 7,897
Weighted average number of shares (Million)
- Basic(2) 5,072 5,067 5,068
- Diluted(3) 5,083 5,078 5,077
Earnings per ordinary share (US cents)(4)
- Basic 87.1 18.3 155.8
- Diluted 86.9 18.3 155.5
Headline earnings per ordinary share (US cents)(5)
- Basic 86.3 67.0 195.9
- Diluted 86.1 66.9 195.6
1 Diluted earnings attributable to BHP shareholders are equal to
earnings attributable to BHP shareholders.
2 The calculation of the number of ordinary shares used in the
computation of basic earnings per share is the weighted average number of
ordinary shares of BHP Group Limited outstanding during the period after
deduction of the number of shares held by the BHP Group Limited Employee
Equity Trust.
3 For the purposes of calculating diluted earnings per share, the
effect of 11 million dilutive shares has been taken into account for the half
year ended 31 December 2024 (31 December 2023: 11 million shares; 30 June
2024: 9 million shares). The Group's only potential dilutive ordinary shares
are share awards granted under employee share ownership plans. Diluted
earnings per share calculation excludes instruments which are considered
antidilutive.
At 31 December 2024, there are no instruments which are
considered antidilutive (31 December 2023: nil; 30 June 2024: nil).
4 Each American Depositary Share (ADS) represents twice the earnings
for BHP Group Limited ordinary share.
5 Headline earnings is a Johannesburg Stock Exchange defined
performance measure and is reconciled from earnings attributable to ordinary
shareholders as follows:
Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Earnings attributable to BHP shareholders 4,416 927 7,897
Adjusted for:
(Gain)/loss on sales of property, plant and equipment, intangibles and (5) (37) (29)
investments(i)
Net (reversal of impairment)/impairment of property, plant and equipment and (56) 3,530 3,905
intangibles
Loss/(gain) on disposal of subsidiaries and operations 2 − (915)
Tax effect of above adjustments 18 (1,023) (928)
Subtotal of adjustments (41) 2,470 2,033
Headline earnings 4,375 3,397 9,930
Diluted headline earnings 4,375 3,397 9,930
i Included in other income.
39
BHP | Financial results for the half year ended 31 December 2024
7. Dividends
Half year ended Half year ended Year ended
31 Dec 2024 31 Dec 2023 30 June 2024
Per share Total Per share Total Per share Total
US cents US$M US cents US$M US cents US$M
Dividends paid during the period
Prior year final dividend 74.0 3,749 80.0 4,065 80.0 4,065
Interim dividend N/A − N/A − 72.0 3,647
74.0 3,749 80.0 4,065 152.0 7,712
Dividends paid during the period differs from the amount of dividends paid in
the Consolidated Cash Flow Statement as a result of foreign exchange gains and
losses relating to the timing of equity distributions between the record date
and the payment date. Proceeds of US$107 million were received on derivative
instruments as part of the funding of the final dividend paid during the
period and disclosed in 'Proceeds from cash management related instruments' in
the Consolidated Cash Flow Statement.
Each American Depositary Share (ADS) represents two ordinary shares of BHP
Group Limited. Dividends determined on each ADS represent twice the dividend
determined on each BHP Group Limited ordinary share.
Dividends are determined after period-end and announced with the results for
the period. Interim dividends are determined in February and paid in March.
Final dividends are determined in August and paid in September or October.
Dividends determined are not recorded as a liability at the end of the period
to which they relate. Subsequent to the half year, on 18 February 2025, BHP
Group Limited determined an interim ordinary dividend of 50 US cents per share
(US$2,537 million), with a payment date of 27 March 2025 (31 December 2023:
interim dividend of 72 US cents per share - US$3,649 million; 30 June 2024:
final dividend of 74 US cents per share - US$3,752 million).
BHP Group Limited dividends for all periods presented are, or will be, fully
franked based on a tax rate of 30 per cent.
40
8. Financial risk management - Fair values
Recognition and measurement
All financial assets and liabilities, other than derivatives and trade
receivables, are initially recognised at the fair value of consideration paid
or received, net of transaction costs as appropriate. Financial assets are
initially recognised on their trade date.
Financial assets are subsequently carried at fair value or amortised cost
based on:
· the Group's purpose, or business model, for holding the financial
asset;
· whether the financial asset's contractual terms give rise to cash
flows that are solely payments of principal and interest.
The resulting Financial Statements classifications of financial assets can be
summarised as follows:
Contractual cash flows Business model Category
Solely principal and interest Hold in order to collect contractual cash flows Amortised cost
Solely principal and interest Hold in order to collect contractual cash flows and sell Fair value through other comprehensive income
Solely principal and interest Hold in order to sell Fair value through profit or loss
Other Any of those mentioned above Fair value through profit or loss
BHP | Financial results for the half year ended 31 December 2024
Solely principal and interest refers to the Group receiving returns only for
the time value of money and the credit risk of the counterparty for financial
assets held. The main exceptions for the Group are provisionally priced
receivables and derivatives which are measured at fair value through profit or
loss under IFRS 9/AASB 9 'Financial Instruments'.
The Group has the intention of collecting payment directly from its customers
in most cases, however the Group also participates in receivables financing
programs in respect of selected customers. Receivables in these portfolios
which are classified as 'hold in order to sell', are provisionally priced
receivables and are therefore held at fair value through profit or loss prior
to sale to the financial institution.
With the exception of derivative contracts and provisionally priced trade
payables which are carried at fair value through profit or loss, the Group's
financial liabilities are classified as subsequently measured at amortised
cost.
The Group may in addition elect to designate certain financial assets or
liabilities at fair value through profit or loss or to apply hedge accounting
where they are not mandatorily held at fair value through profit or loss.
Fair value measurement
The carrying amount of financial assets and liabilities measured at fair value
is principally calculated based on inputs other than quoted prices that are
observable for these financial assets or liabilities, either directly (i.e. as
unquoted prices) or indirectly (i.e. derived from prices). Where no price
information is available from a quoted market source, alternative market
mechanisms or recent comparable transactions, fair value is estimated based on
the Group's views on relevant future prices, net of valuation allowances to
accommodate liquidity, modelling and other risks implicit in such estimates.
The inputs used in fair value calculations are determined by the relevant
segment or function. The functions support the assets and operate under a
defined set of accountabilities authorised by the Executive Leadership Team.
Movements in the fair value of financial assets and liabilities may be
recognised through the income statement or in other comprehensive income
according to the designation of the underlying instrument.
For financial assets and liabilities carried at fair value, the Group uses the
following to categorise the inputs to the valuation method used based on the
lowest level input that is significant to the fair value measurement as a
whole:
IFRS 13 Fair value hierarchy Level 1 Level 2 Level 3
Valuation inputs Based on quoted prices (unadjusted) in active markets for identical financial Based on inputs other than quoted prices included within Level 1 that are Based on inputs not observable in the market using appropriate valuation
assets and liabilities. observable for the financial asset or liability, either directly (i.e. as models, including discounted cash flow modelling.
unquoted prices) or indirectly (i.e. derived from prices).
41
BHP | Financial results for the half year ended 31 December 2024
Financial assets and liabilities
The financial assets and liabilities are presented by class in the table below
at their carrying amounts.
IFRS 13 Fair value hierarchy Level(1) IFRS 9 Classification 31 Dec 2024 30 June 2024
US$M US$M
Current cross currency and interest rate swaps(2) 2 Fair value through profit or loss − 5
Current other derivative contracts(3) 2,3 Fair value through profit or loss 235 118
Current other financial assets(4) 3 Fair value through profit or loss 28 −
Current other financial assets(5) Amortised cost 246 234
Current other investments(6) 1,2 Fair value through profit or loss 24 24
Non-current cross currency and interest rate swaps(2) 2 Fair value through profit or loss 122 113
Non-current other derivative contracts(3) 2,3 Fair value through profit or loss 65 103
Non-current other financial assets(4) 3 Fair value through profit or loss 168 195
Non-current other financial assets(5,7) Amortised cost 416 398
Non-current investment in shares 1,3 Fair value through other comprehensive income 267 201
Non-current other investments(6) 1,2 Fair value through profit or loss 192 219
Total other financial assets 1,763 1,610
Cash and cash equivalents Amortised cost 9,560 12,501
Trade and other receivables(8) Amortised cost 1,194 1,597
Provisionally priced trade receivables 2 Fair value through profit or loss 2,748 3,250
Total financial assets 15,265 18,958
Non-financial assets 85,457 83,404
Total assets 100,722 102,362
Current cross currency and interest rate swaps(2) 2 Fair value through profit or loss − 176
Current other derivative contracts 2 Fair value through profit or loss 249 241
Current other financial liabilities(9) Amortised cost 76 95
Non-current cross currency and interest rate swaps(2) 2 Fair value through profit or loss 1,516 1,337
Non-current other derivative contracts 2,3 Fair value through profit or loss 144 54
Non-current other financial liabilities(9) Amortised cost 311 368
Total other financial liabilities 2,296 2,271
Trade and other payables(10) Amortised cost 5,284 6,049
Provisionally priced trade payables 2 Fair value through profit or loss 711 614
Bank overdrafts and short-term borrowings(11) Amortised cost 1 3
Bank loans(11) Amortised cost 3,737 2,610
Notes and debentures(11) Amortised cost 13,918 14,932
Lease liabilities(12) 2,491 3,116
Other(11) Amortised cost 48 57
Total financial liabilities 28,486 29,652
Non-financial liabilities 22,639 23,590
Total liabilities 51,125 53,242
1 All of the Group's financial assets and financial liabilities
recognised at fair value were valued using market observable inputs
categorised as Level 2 unless specified otherwise in the following footnotes.
2 Cross currency and interest rate swaps are valued using market data
including interest rate curves and foreign exchange rates. A discounted cash
flow approach is used to derive the fair value of cross currency and interest
rate swaps at the reporting date.
3 Includes net other derivative assets of US$72 million related to
power purchase contract agreements that are categorised as Level 3 (30 June
2024: US$92 million).
4 Includes receivables contingent on future realised coal price of
US$196 million (30 June 2024: US$195 million).
5 Includes deferred consideration of US$520 million in relation to
the divestment of the Blackwater and Daunia mines completed on 2 April 2024
(30 June 2024: US$495 million).
6 Includes investments held by BHP Foundation which are restricted
and not available for general use by the Group of US$216 million (30 June
2024: US$243 million) of which other investments (mainly US Treasury Notes) of
US$129 million is categorised as Level 1 (30 June 2024: US$134 million).
7 Includes Senior notes of US$142 million (30 June 2024: US$137
million) relating to Samarco with a maturity date of 30 June 2031. Refer to
note 9 'Significant events - Samarco dam failure' for further information.
8 Excludes input taxes of US$521 million (30 June 2024: US$492
million) included in other receivables.
9 Includes the discounted settlement liability in relation to the
cancellation of power contracts at the Group's Escondida operations.
10 Excludes input taxes of US$70 million (30 June 2024: US$101 million)
included in other payables.
11 All interest bearing liabilities, excluding lease liabilities, are
unsecured.
12 Lease liabilities are measured in accordance with IFRS 16/AASB 16
'Leases'.
42
BHP | Financial results for the half year ended 31 December 2024
The carrying amounts in the table above generally approximate to fair value.
In the case of US$525 million (30 June 2024: US$532 million) of fixed rate
debt not swapped to floating rate, the fair value at 31 December 2024 was
US$537 million (30 June 2024: US$538 million). The fair value is determined
using a method that can be categorised as Level 2 and uses inputs based on
benchmark interest rates, alternative market mechanisms or recent comparable
transactions.
For financial instruments that are carried at fair value on a recurring basis,
the Group determines whether transfers have occurred between levels in the
fair value hierarchy by reassessing categorisation at the end of each
reporting period. There were no transfers between categories during the
period.
9. Significant events - Samarco dam failure
As a result of the Samarco dam failure on 5 November 2015, BHP Billiton Brasil
Ltda (BHP Brasil) and other Group entities continue to incur costs and
maintain liabilities for future costs. The information presented in this note
should be read in conjunction with section 7 'Samarco', Financial Statements
note 4 'Significant events - Samarco dam failure' and Additional Information
section 8 'Legal proceedings' in the 30 June 2024 Annual Report.
The financial impacts of the Samarco dam failure on the Group's income
statement, balance sheet and cash flow statement for the half year ended 31
December 2024 are shown below and have been treated as an exceptional item.
Financial impacts of Samarco dam failure Half year Half year Year
ended ended ended
31 Dec 31 Dec 30 June
2024 2023 2024
US$M US$M US$M
Income statement
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to (114) (54) (139)
the Samarco dam failure(1)
Profit/(loss) from equity accounted investments, related impairments and
expenses:
Samarco dam failure provision(2) 194 (2,982) (2,833)
Fair value change on forward exchange derivatives(3) (314) 106 (199)
Loss from operations (234) (2,930) (3,171)
Net finance costs(4) (208) (190) (506)
Loss before taxation (442) (3,120) (3,677)
Income tax expense(5) − (53) (85)
Loss after taxation (442) (3,173) (3,762)
Balance sheet movement
Other financial (liabilities)/assets(6) (272) 94 (280)
Trade and other payables (1) (12) (4)
Tax liabilities − (53) (85)
Provisions 623 (2,851) (2,824)
Net decrease/(increase) in liabilities 350 (2,822) (3,193)
43
BHP | Financial results for the half year ended 31 December 2024
Half year ended Half year ended Year ended
31 Dec 2024 31 Dec 2023 30 June 2024
US$M US$M US$M
Cash flow statement
Loss before taxation (442) (3,120) (3,677)
Adjustments for:
Samarco dam failure provision(2) (194) 2,982 2,833
Fair value change on forward exchange derivatives(3) 314 (106) 199
(Settlement of)/proceeds from cash management related instruments (37) 142 218
Net finance costs(4) 208 190 506
Changes in assets and liabilities:
Trade and other payables 1 12 4
Net operating cash flows (150) 100 83
Net investment and funding of equity accounted investments(7) (637) (446) (640)
Net investing cash flows (637) (446) (640)
Net decrease in cash and cash equivalents (787) (346) (557)
1 Includes legal and advisor costs incurred.
2 US$440 million (31 December 2023: US$3,000 million; 30 June 2024:
US$3,700 million) change in estimate and US$(634) million (31 December 2023:
US$(18) million; 30 June 2024: US$(867) million) exchange translation.
3 The Group enters into forward exchange contracts to limit the
Brazilian reais exposure on the dam failure provision. While not applying
hedge accounting, the fair value changes in the forward exchange instruments
are recorded within Profit/(loss) from equity accounted investments, related
impairments and expenses in the Income Statement.
4 Amortisation of discounting of provision.
5 Includes tax on forward exchange derivatives and other taxes
incurred during the period.
6 Includes forward exchange contracts described in 3 above, and
Senior notes issued by Samarco as part of its Judicial Reorganisation in
September 2023.
7 Current period reflects US$(637) million utilisation of the Samarco
dam failure provision including the first settlement payment under the
Settlement Agreement ratified on 6 November 2024. Comparative periods comprise
utilisation of the Samarco dam failure provision (31 December 2023: US$(321)
million; 30 June 2024: US$(515) million) and US$(125) million provided to
Samarco following approval of the Judicial Reorganisation.
Equity accounted investment in Samarco
BHP Brasil's investment in Samarco remains at US$ nil. No dividends have been
received by BHP Brasil from Samarco during the period and Samarco currently
does not have profits available for distribution.
Provision related to the Samarco dam failure
31 Dec 2024 30 June 2024
US$M US$M
At the beginning of the reporting period 6,505 3,681
Movement in provision (623) 2,824
Comprising:
Utilised (637) (515)
Adjustments charged to the income statement:
Change in cost estimate 440 3,700
Amortisation of discounting impacting net finance costs 208 506
Exchange translation (634) (867)
At the end of the reporting period 5,882 6,505
Comprising:
Current 2,013 1,500
Non-current 3,869 5,005
At the end of the reporting period 5,882 6,505
Samarco dam failure provision and contingencies
As at 31 December 2024, BHP Brasil has identified a provision and certain
contingent liabilities arising as a consequence of the Samarco dam failure.
The provision only reflects the future cost estimates associated with the
obligations set out in the Settlement Agreement (see below).
Contingent liabilities will only be resolved when one or more uncertain future
events occur or related impacts become capable of reliable measurement and, as
such, determination of contingent liabilities disclosed in the financial
statements requires significant judgement regarding the outcome of future
events. A number of the claims below do not specify the amount of damages
sought and, where this is specified, amounts could change as the matter
progresses.
44
BHP | Financial results for the half year ended 31 December 2024
Ultimately, future changes in all those matters for which a provision has been
recognised or contingent liability disclosed could have a material adverse
impact on BHP's business, competitive position, cash flows, prospects,
liquidity and shareholder returns.
The following table summarises the current status of significant ongoing
matters relating to the Samarco dam failure, along with developments during
the financial year, and the associated treatment in the Financial Statements:
Item Provision Contingent liability
Samarco dam failure - Settlement Agreement
ü
û
On 2 March 2016, BHP Brasil, Samarco and Vale S.A. (Vale) (the Companies)
entered into a Framework Agreement with the Federal Government of Brazil, the
states of Espirito Santo and Minas Gerais, and certain other public
authorities to establish a foundation (Fundação Renova) to develop and
execute environmental and socio-economic programs (Programs) to remediate and
provide compensation for damage caused by the Samarco dam failure (the
Framework Agreement). Key Programs included those for financial assistance and
compensation of impacted persons and those for remediation of impacted areas
and resettlement of impacted communities.
On 3 May 2016, the Brazilian Federal Public Prosecution Office brought a civil
claim against BHP Brasil and others seeking R$155 billion for reparation,
compensation and moral damages in relation to the Samarco dam failure. Since
the lodgement of the claim, the Federal Court had issued a number of interim
decisions, certain of which were subject to ongoing appeal at 30 June 2024.
On 25 October 2024, the Companies entered into an agreement with the Federal
Government of Brazil, State of Minas Gerais, State of Espirito Santo, public
prosecutors and public defenders (Public Authorities) that delivers full and
final settlement of the Framework Agreement obligations, the Federal Public
Prosecution Office civil claim and other claims by the Public Authorities
relating to Samarco's Fundão dam failure (Settlement Agreement). On 6
November 2024 the Settlement Agreement was fully ratified by the Brazilian
Supreme Court. A number of motions for clarification have been lodged with the
Supreme Court and remain pending.
Item Provision Contingent liability
The Settlement Agreement provides compensation and reparation for the impacts
of the dam failure, and builds on the existing remediation and compensation
work already performed by Fundação Renova. The Settlement Agreement was
announced as having a financial value of R$170 billion (approximately US$31.7
billion(( 13 (#_ftn13) ))) on a 100% basis, including amounts already spent
plus future payments and obligations as follows:
· R$38 billion (approximately US$7.9 billion(1)) in amounts already
spent to 30 September 2024 on remediation and compensation since 2016.
· R$100 billion (approximately US$18.0 billion(1)) in instalments
over 20 years to the Public Authorities, the relevant municipalities
and Indigenous peoples and traditional communities (Obligation to Pay).
· Additional performance obligations for an estimated financial value
of approximately R$32 billion (approximately US$5.8 billion(1)) that will be
carried out by Samarco in accordance with the terms of the Agreement
(Obligations to Perform). These obligations include remediation and
compensation programs that are expected to be largely completed over the next
15 years.
45
Under the Settlement Agreement, Samarco is the primary obligor for the
settlement obligations and BHP Brasil and Vale are each secondary obligors of
any obligation that Samarco cannot fund or perform in proportion to their
shareholding at the time of the dam failure, which is 50% each. While Samarco
has recommenced operations, Samarco's long-term cash flow generation remains
highly sensitive to factors including returning to full production capacity,
commodity prices and foreign exchange rates.
Further, under the Samarco Judicial Reorganisation Plan (JR Plan), ratified by
the JR Court on 1 September 2023, Samarco's funding of obligations to
remediate and compensate the damages resulting from the dam failure is capped
at US$1 billion for the period CY2024 to CY2030. Notwithstanding this cap, and
subject to certain conditions, to the extent that Samarco each year has a
positive cash balance after meeting its various obligations, during this
period Samarco's shareholders are able to direct 50 per cent of Samarco's year
end excess cash balance to fund remediation obligations, including those
arising from the Settlement Agreement.
The Group has considered the outcomes of the Settlement Agreement, including
the estimated costs of executing the Obligations to Perform, and the extent to
which Samarco may be in a position to fund any future outflows to measure the
provision related to the Samarco dam failure at US$5,882 million at 31
December 2024. The provision reflects the Group's best estimate of outflows
required to settle all obligations arising from the Settlement Agreement.
Uncertainty remains around the Obligations to Perform, and there is a risk
that outcomes may be materially higher or lower than amounts reflected in BHP
Brasil's provision for the Samarco dam failure. Key areas of uncertainty
include the future costs relating to the Obligation to Perform programs and
the extent to which Samarco is able to directly fund the settlement
obligations. Further information on the key areas of estimation uncertainty is
provided in the 'Key judgements and estimates' section below.
BHP Brasil, Samarco and Vale continue to maintain security, as required by a
Governance Agreement, ratified on 8 August 2018, with the security currently
comprising insurance bonds and a charge over certain Samarco assets. The
security is expected to be released during CY2025 considering that there is no
requirement under the Settlement Agreement to maintain the existing security.
Item Provision Contingent liability
Australian class action claim
BHP Group Limited is named as a defendant in a shareholder class action filed û ü
in the Federal Court of Australia on behalf of persons who acquired shares in
BHP Group Limited or BHP Group Plc (now BHP Group (UK) Ltd) in periods prior
to the Samarco dam failure.
The amount of damages sought is unspecified. A trial is scheduled to commence
in September 2025.
United Kingdom group action claim and Vale and Samarco's Netherlands û ü
collective action claim
BHP Group (UK) Ltd (formerly BHP Group Plc) and BHP Group Limited (BHP
Defendants) are named as defendants in group action claims for damages filed
in the courts of England. These claims were filed on behalf of certain
individuals, municipalities, businesses, faith-based institutions and
communities in Brazil allegedly impacted by the Samarco dam failure.
46
The amount of damages sought in these claims is unspecified. A trial in
relation to BHP's liability for the Samarco dam failure commenced in October
2024 and is expected to conclude in March 2025 and therefore a present
obligation in relation to this matter is yet to be determined.
In December 2022, the BHP Defendants filed their defence and a contribution
claim against Vale. The contribution claim contended that if the BHP
Defendants' defence is not successful and the BHP Defendants are ordered to
pay damages to the claimants, Vale should contribute to any amount payable.
Vale contested the jurisdiction of the English courts to determine the
contribution claim, with those challenges ultimately dismissed in December
2023.
In January 2024, the BHP Defendants were served with a new group action filed
in the courts of England on behalf of additional individuals and businesses in
Brazil allegedly impacted by the Samarco dam failure. The new action makes
broadly the same claims as the original action and the amount of damages
sought in these claims is unspecified.
In March 2024, a collective action complaint was filed in the Netherlands
against Vale and a Dutch subsidiary of Samarco for compensation relating to
the Fundão Dam failure. The claim filed in the Netherlands indicates that
these claims were filed on behalf of certain individuals, municipalities,
businesses, associations and faith-based institutions allegedly impacted by
the Samarco dam failure who are not also claimants in the UK group action
claims referred to above. BHP is not a defendant in the Netherlands
proceedings.
In July 2024, the BHP Defendants, BHP Brasil and Vale entered into an
agreement - without any admission of liability in any proceedings - whereby:
(i) Vale will pay 50% of any amounts that may be payable by the BHP Defendants
to the claimants in the UK group action claims (or by the BHP Defendants, BHP
Brasil or their related parties to claimants in any other proceedings in
Brazil, England or the Netherlands covered by the agreement); and (ii) BHP
Brasil will pay 50% of any amounts that may be payable by Vale to the
claimants in the Netherlands proceedings (or by Vale or its related parties to
claimants in any other proceedings in Brazil, England or the Netherlands
covered by the agreement). The agreement reinforced the terms of the Framework
Agreement entered into in 2016 and is consistent with the aforementioned
Settlement Agreement entered into in October 2024, which requires BHP Brasil
and Vale to each contribute 50% to the funding of the settlement obligations
where Samarco is unable to contribute that funding. The BHP Defendants
withdrew the contribution claim against Vale in England as it is no longer
necessary given this agreement.
Item Provision Contingent liability
Criminal charges
The Federal Prosecutors' Office filed criminal charges against BHP Brasil, û ü
Samarco and Vale and certain employees and former employees of BHP Brasil
(Affected Individuals) in the Federal Court of Ponte Nova, Minas Gerais
(Federal Court).
On 14 November 2024, the Federal Court ruled that BHP Brasil, Samarco and Vale
and certain Affected Individuals (non-affiliated with BHP) who still had their
cases open, are not liable for criminal offences relating to the failure of
Samarco's Fundão tailings dam. In December 2024 the Federal Prosecutors'
Office filed an appeal, and a ruling is pending.
As to the Affected Individuals affiliated to BHP, four had their cases closed,
while the remaining four had favourable decisions dismissing the charges
against them. A ruling on Federal Prosecutors' Office appeal is pending.
47
Civil public action commenced by Associations concerning the use of TANFLOC û ü
for
water treatment
Following the dismissal, on 17 November 2023, of an initial lawsuit filed by
four associations due to procedural reasons (an appeal is pending), in July
2024 two further associations filed another lawsuit against Samarco, BHP
Brasil and Vale and others, including the States of Minas Gerais and Espirito
Santo; the Federal Government and the Water Treatment Companies, who were all
also defendants in the first lawsuit.
The second lawsuit was also dismissed due to procedural reasons on 12
November 2024 and the associations have appealed against this judgement with
BHP Brasil having until 28 February 2025 to respond to the appeal.
In the lawsuits the plaintiffs alleged that the defendants carried out a
clandestine study on the citizens of the locations affected by the Fundão Dam
Failure where Tanfloc - a tannin-based flocculant/coagulant - was used in the
water treatment process. The plaintiffs claim that this product allegedly put
the population at risk due to its alleged experimental qualities and dosage
applied.
The plaintiffs presented largely similar pleas - e.g. material damages, moral
damages - with the first lawsuit including a request for loss of profits and
that the defendants should pay for water supply in all locations where there
is no water source other than the Doce River.
Item Provision Contingent liability
Other claims
BHP Brasil is among the companies named as defendants in a number of legal û ü
proceedings initiated by individuals, non-governmental organisations,
corporations and governmental entities in Brazilian Federal and State courts
following the Samarco dam failure. The other defendants include Vale, Samarco
and Fundação Renova.
The lawsuits include claims for compensation, environmental reparation and
violations of Brazilian environmental and other laws, among other matters. The
lawsuits seek various remedies including reparation costs, compensation to
injured individuals and families of the deceased, recovery of personal and
property losses, moral damages and injunctive relief.
Certain of these legal proceedings are outside the scope of the Settlement
Agreement.
In addition, government inquiries, studies and investigations relating to the
Samarco dam failure have been commenced by numerous agencies and individuals
of the Brazilian government and may still be ongoing.
Additional lawsuits and government investigations relating to the Samarco dam
failure could be brought against BHP Brasil and other Group entities in Brazil
or other jurisdictions.
The outcomes of these claims, investigations and proceedings remain uncertain
and continue to be disclosed as contingent liabilities.
48
BHP | Financial results for the half year ended 31 December 2024
Commitments
Under the terms of the Samarco joint venture agreement, BHP Brasil does not
have an existing obligation to fund Samarco.
However, under the Settlement Agreement, while Samarco is the primary obligor
for the Settlement Agreement obligations, BHP Brasil and Vale are each
secondary obligors of any obligation that Samarco cannot fund (including as
restricted by the terms of the Judicial Reorganisation) or perform in
proportion to their shareholding at the time of the dam failure, which is 50%
each.
BHP Brasil has approved preliminary funding of up to US$1 billion to Samarco
for the Settlement Agreement obligations during calendar year 2025.
Key judgements and estimates
Judgements
The outcomes of litigation are inherently difficult to predict and significant
judgement has been applied in assessing the likely outcome of legal claims and
determining which legal claims require recognition of a provision or
disclosure of a contingent liability. The facts and circumstances relating to
these cases are regularly evaluated in determining whether a provision for any
specific claim is required.
Management has determined that a provision can be recognised at 31 December
2024 to reflect the estimated costs associated with obligations under the
Settlement Agreement. It is not yet possible to provide a range of possible
outcomes or a reliable estimate of potential future exposures to BHP in
connection to the contingent liabilities noted above, given their status.
Estimates
The provision for the Samarco dam failure reflects the Group's estimate of the
costs to meet the Group's obligations under the Settlement Agreement and
requires the use of significant judgements, estimates and assumptions.
While the provision has been measured based on the latest information
available, changes in facts and circumstances are likely in future reporting
periods and may lead to material revisions to these estimates and there is a
risk that outcomes may be materially higher or lower than amounts currently
reflected in the provision. However, it is currently not possible to determine
what facts and circumstances may change, therefore revisions in future
reporting periods due to the key estimates and factors outlined below cannot
be reliably measured.
The key estimates that may have a material impact upon the provision in the
next and future reporting periods include:
· the cost of executing the Obligations to Perform Programs under the
Settlement Agreement, including as a result of the number of individuals,
small businesses, Municipalities and Indigenous and Traditional communities
who opt-in to the Settlement Agreement and the extent to which individuals
opting-in are eligible for indemnification under the Settlement agreement; and
· the extent to which Samarco is able to directly fund any future
obligations relating to the Settlement Agreement. Samarco's long-term cash
flow generation remains highly sensitive to factors including its ability to
return to full production capacity, commodity prices and foreign exchange
rates.
The provision may also be affected by factors including but not limited to
updates to discount and foreign exchange rates. To limit the Group's exposure
to potential Brazilian reais foreign exchange volatility, the Group has
entered into forward exchange contracts, predominantly covering the period up
to FY2028. A 0.5% increase in the discount rate would, in isolation, reduce
the provision by approximately US$100 million.
In addition, the provision may be impacted by decisions in, or resolution of,
existing and potential legal claims in Brazil and other jurisdictions,
including the outcome of the United Kingdom group action claims, the
Australian class action and the claim filed in the Netherlands against Vale
and a Dutch subsidiary of Samarco.
Given these factors, future actual cash outflows may differ from the amounts
currently provided and changes to any of the key assumptions and estimates
outlined above could result in a material impact to the provision in the next
and future reporting periods.
49
BHP | Financial results for the half year ended 31 December 2024
10. Subsequent events
On the 15 January 2025, the Group announced that BHP Investments Canada Inc.
(BHP Canada) and Lundin Mining Corporation (Lundin Mining) had completed the
acquisition of Filo Corp., a Toronto Stock Exchange listed company. Filo Corp.
owns 100% of the Filo del Sol (FDS) copper project.
BHP Canada and Lundin Mining have also formed the Canadian-incorporated joint
venture company, Vicuña Corp. (the Joint Venture) to hold the FDS copper
project and the Josemaria copper project located in the Vicuña district of
Argentina and Chile. BHP Canada and Lundin Mining each own 50% of the Joint
Venture.
Prior to completion, Lundin Mining owned 100% of the Josemaria project. At
completion, BHP Canada acquired a 50% interest in the Josemaria copper project
from Lundin Mining. BHP Canada and Lundin Mining then contributed their
respective 50% interests in Filo Corp. and the Josemaria project into the
Joint Venture.
BHP's total cash payment for the Transaction was US$2.0 billion.
Other than the matters outlined elsewhere in this Financial Report, no matters
or circumstances have arisen since the end of the half year that have
significantly affected, or may significantly affect, the operations, results
of operations or state of affairs of the Group in subsequent accounting
periods.
50
BHP | Financial results for the half year ended 31 December 2024
Directors' Report
The Directors present their report together with the half year Financial
Statements for the half year ended 31 December 2024 and the auditor's review
report thereon.
Review of Operations
A detailed review of the Group's operated and non-operated assets, the results
of those operations during the half year ended 31 December 2024 and likely
future developments are given on pages 1 to 28. The Review of Operations has
been incorporated into, and forms part of, this Directors' Report.
Principal Risks and Uncertainties
The principal risks affecting the Group are described on pages 73 to 82 of the
Group's Annual Report for the year ended 30 June 2024 (a copy of which is
available on the Group's website at www.bhp.com
(file:///C%3A/Users/fernrf/AppData/Local/Temp/CDM/CFC04A595B18DCB787F5D05D1E8970378B6AA65C01E2082C9BB5D1E50C132A17/www.bhp.com)
) and are grouped into the categories of risks listed below. Our principal
risks may occur as a result of our activities globally, including in
connection with our operated and non-operated assets, third parties engaged by
BHP or through our value chain. Our principal risks, individually or
collectively, could threaten our viability, strategy, business model, future
performance, solvency or liquidity and reputation. They could also materially
and adversely affect the health and safety of our people or members of the
public, the environment, the communities where we or our third-party partners
operate, or the interests of our stakeholders, which could in each case, lead
to litigation, regulatory investigation or enforcement action (including class
actions or actions arising from contractual, legacy or other liabilities
associated with divested assets), or a loss of stakeholder and/or investor
confidence. There are no material changes in those risk factors for the first
six months of this financial year except to the extent described in the
'Outlook' section.
· Operational events: Risks associated with operational events in
connection with our activities globally, resulting in significant adverse
impacts on our people, communities, the environment or our business.
· Significant social or environmental impacts: Risks associated with
significant impacts of our operations on and contributions to communities and
environments throughout the life cycle of our assets and across our value
chain.
· Optimising growth and portfolio returns: Risks associated with our
ability to position our asset portfolio to generate returns and value for
shareholders, including through acquisitions, mergers and divestments.
· Low-carbon transition: Risks associated with the transition to a
low-carbon economy.
· Accessing key markets: Risks associated with market concentration
and our ability to sell and deliver products into existing and future key
markets, impacting our economic efficiency.
· Adopting technologies and maintaining digital security: Risks
associated with adopting and implementing new technologies, and maintaining
the effectiveness of our existing digital landscape (including cyber defences)
across our value chain.
· Ethical misconduct: Risks associated with actual or alleged
deviation from societal or business expectations of ethical behaviour
(including breaches of laws or regulations) and wider or cumulative
organisational cultural failings, resulting in significant reputational
impacts.
· Inadequate business resilience: Risks associated with unanticipated
or unforeseeable adverse events and a failure of planning and preparedness to
respond to, manage and recover from adverse events (including potential
physical climate-related impacts).
Dividend
Full details of dividends are given on page 4 (#_Value_and_returns) .
51
BHP | Financial results for the half year ended 31 December 2024
Board of Directors
The Directors of BHP at any time during or since the end of the half year
ended 31 December 2024 are:
Ken MacKenzie - Chairman since 1 September 2017 (a Director since 22 September
2016)
Mike Henry - an Executive Director since 1 January 2020
Xiaoqun Clever-Steg - a Director since 1 October 2020
Gary Goldberg - a Director since 1 February 2020
Michelle Hinchliffe - a Director since 1 March 2022
Don Lindsay - a Director since May 2024
Ross McEwan - a Director since April 2024
Christine O'Reilly - a Director since 12 October 2020
Catherine Tanna - a Director since 4 April 2022
Dion Weisler - a Director since 1 June 2020
Auditor's independence declaration
Ernst & Young in Australia are the auditors of BHP Group Limited. Their
auditor's independence declaration under Section 307C of the Australian
Corporations Act 2001 is set out on page 54 and forms part of this Directors'
Report.
Rounding of amounts
BHP Group Limited is an entity to which Australian Securities and Investments
Commission (ASIC) Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 applies. Amounts in the Directors' Report and half year
Financial Statements have been rounded to the nearest million dollars in
accordance with ASIC Instrument 2016/191.
Signed in accordance with a resolution of the Board of Directors.
Ken MacKenzie - Chair
Mike Henry - Chief Executive Officer
Dated this 18th day of February 2025
52
BHP | Financial results for the half year ended 31 December 2024
Directors' Declaration of Responsibility
The half year Financial Report is the responsibility of, and has been approved
by, the Directors. In accordance with a resolution of the Directors of BHP
Group Limited, the Directors declare that:
(a) in the Directors' opinion and to the best of their knowledge, the
half year Financial Statements and notes, set out on pages 29 to 50, have been
prepared in accordance with the Australian Corporations Act 2001, including:
(i) complying with applicable accounting standards and the Australian
Corporations Regulations 2001; and
(ii) giving a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group as at 31 December 2024 and of its
performance for the half year ended on that date;
(b) for the purposes of the Disclosure Guidance and Transparency Rules in
the United Kingdom, to the best of the Directors' knowledge, the Directors'
Report, which incorporates the Review of Operations on pages 1 to 28,
includes: a fair review of (i) the important events during the first six
months of the current financial year and their impact on the half year
Financial Statements; (ii) a description of the principal risks and
uncertainties for the remaining six months of the year; and (iii) related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Group during that period, and changes in the
related party transactions described in the last annual report that could have
such a material effect; and
(c) in the Directors' opinion, there are reasonable grounds to believe
that BHP Group Limited will be able to pay its debts as and when they become
due and payable.
Signed on behalf of the Directors in accordance with a resolution of the Board
of Directors.
Ken MacKenzie - Chair
Mike Henry - Chief Executive Officer
Dated this 18th day of February 2025
53
BHP | Financial results for the half year ended 31 December 2024
Auditor's Independence Declaration to the Directors of BHP Group Limited
As lead auditor for the review of the financial report of BHP Group Limited
for the half year ended 31 December 2024, I declare to the best of my
knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review;
b. No contraventions of any applicable code of professional conduct in
relation to the review; and
c. No non-audit services provided that contravene any applicable code of
professional conduct in relation to the review.
This declaration is in respect of BHP Group Limited and the entities it
controlled during the financial period.
Ernst & Young
Rodney Piltz
Partner
Melbourne
18 February 2025
54
BHP | Financial results for the half year ended 31 December 2024
Independent Review Report
Independent auditor's review report to the members of BHP Group Limited
Conclusion
We have reviewed the accompanying half year financial report of BHP Group
Limited and its subsidiaries (collectively the Group), which comprises the
consolidated balance sheet as at 31 December 2024, the consolidated income
statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated cash flow statement for the
half year ended on that date, notes comprising material accounting policy
information and other explanatory information, and the directors' declaration.
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half year financial report of the Group
does not comply with the Corporations Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the
Group as at 31 December 2024 and of its consolidated financial performance for
the half year ended on that date; and
b. Complying with International Accounting Standard IAS 34 Interim Financial
Reporting as issued by the International Accounting Standards Board (IASB),
Australian Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001.
Basis for conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial
Report Performed by the Independent Auditor of the Entity (ASRE 2410) and ISRE
2410 Review of Interim Financial Information Performed by the Independent
Auditor of the Entity (ISRE 2410). Our responsibilities are further described
in the Auditor's responsibilities for the review of the half-year financial
report section of our report. We are independent of the Group in accordance
with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the
annual financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
Directors' responsibilities for the half year financial report
The directors of the Company are responsible for the preparation of the half
year financial report that gives a true and fair view in accordance with
International Accounting Standards as issued by the IASB, Australian
Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of
the half year financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
55
BHP | Financial results for the half year ended 31 December 2024
Auditor's responsibilities for the review of the half year financial report
Our responsibility is to express a conclusion on the half year financial
report based on our review.
ASRE 2410 and ISRE 2410 require us to conclude whether we have become aware of
any matter that makes us believe that the half year financial report is not in
accordance with the Corporations Act 2001 including giving a true and fair
view of the Group's financial position as at 31 December 2024 and its
performance for the half year ended on that date, and complying with
International Accounting Standard IAS 34 Interim Financial Reporting as issued
by the IASB, Australian Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001.
A review of a half year financial report consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with Australian Auditing
Standards or International Standards on Auditing issued by the International
Auditing and Assurance Standards Board and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
Ernst & Young
Rodney Piltz
Partner
Melbourne
18 February 2025
56
Non-IFRS Financial Information
Half year ended
31 December 2024
Non-IFRS Financial Information
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information
We use various non-IFRS financial information to reflect our underlying
financial performance.
Non-IFRS financial information is not defined or specified under the
requirements of IFRS, but is derived from the Group's Consolidated Financial
Statements prepared in accordance with IFRS. The non-IFRS financial
information and the below reconciliations included in this document are
unaudited. The non-IFRS financial information presented is consistent with how
management review financial performance of the Group with the Board and the
investment community.
The "Definition and calculation of non-IFRS financial information" section
outlines why we believe non-IFRS financial information is useful and the
calculation methodology. We believe non-IFRS financial information provides
useful information, however should not be considered as an indication of, or
as a substitute for, statutory measures as an indicator of actual operating
performance (such as profit or net operating cash flow) or any other measure
of financial performance or position presented in accordance with IFRS, or as
a measure of a company's profitability, liquidity or financial position.
The following tables provide reconciliations between non-IFRS financial
information and their nearest respective IFRS measure.
Exceptional items
To improve the comparability of underlying financial performance between
reporting periods, some of our non-IFRS financial information adjusts the
relevant IFRS measures for exceptional items. Refer to the Group's Financial
Report for further information on exceptional items.
Exceptional items are those gains or losses where their nature, including the
expected frequency of the events giving rise to them, and impact is considered
material to the Group's Consolidated Financial Statements. The exceptional
items included within the Group's profit for the financial periods are
detailed below.
Half year ended 31 December 2024 2023
US$M US$M
Revenue − −
Other income − −
Expenses excluding net finance costs, depreciation, amortisation and (524) (54)
impairments
Depreciation and amortisation − −
Net reversal of impairment/(impairment) of property, plant and equipment and 90 (3,500)
intangibles
Profit/(loss) from equity accounted investments, related impairments and (120) (2,876)
expenses
Profit/(loss) from operations (554) (6,430)
Financial expenses (208) (190)
Financial income − −
Net finance costs (208) (190)
Profit/(loss) before taxation (762) (6,620)
Income tax (expense)/benefit 96 978
Royalty-related taxation (net of income tax benefit) − −
Total taxation (expense)/benefit 96 978
Profit/(loss) after taxation (666) (5,642)
Total exceptional items attributable to non-controlling interests − −
Total exceptional items attributable to BHP shareholders (666) (5,642)
Exceptional items attributable to BHP shareholders per share (US cents) (13.1) (111.3)
Weighted basic average number of shares (Million) 5,072 5,067
58
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information derived from Consolidated Income Statement
Underlying attributable profit
Half year ended 31 December 2024 2023
US$M US$M
Profit after taxation attributable to BHP shareholders 4,416 927
Total exceptional items attributable to BHP shareholders(1) 666 5,642
Underlying attributable profit 5,082 6,569
1 Refer to Exceptional items for further information.
Underlying basic earnings per share
Half year ended 31 December 2024 2023
US cents US cents
Basic earnings per ordinary share 87.1 18.3
Exceptional items attributable to BHP shareholders per share(1) 13.1 111.3
Underlying basic earnings per ordinary share 100.2 129.6
1 Refer to Exceptional items for further information.
Underlying EBITDA
Half year ended 31 December 2024 2023
US$M US$M
Profit from operations 9,126 4,803
Exceptional items included in profit from operations(1) 554 6,430
Underlying EBIT 9,680 11,233
Depreciation and amortisation expense 2,648 2,629
Net (reversal of impairment)/impairment of property, plant and equipment and (56) 3,513
intangibles
Exceptional items included in Depreciation, amortisation and impairments(1) 90 (3,500)
Underlying EBITDA 12,362 13,875
1 Refer to Exceptional items for further information.
59
BHP | Financial results for the half year ended 31 December 2024
Underlying EBITDA - Segment
Half year ended 31 December 2024 Copper Iron Ore Coal Group and unallocated items/ eliminations(2) Total Group
US$M
Profit from operations 3,883 6,034 289 (1,080) 9,126
Exceptional items included in profit from operations(1) − 162 − 392 554
Depreciation and amortisation expense 1,121 988 277 262 2,648
Net (reversal of impairment)/impairment of property, plant and equipment and 7 3 1 (67) (56)
intangibles
Exceptional items included in Depreciation, amortisation and impairments(1) − − − 90 90
Underlying EBITDA 5,011 7,187 567 (403) 12,362
Half year ended 31 December 2023 Copper Iron Ore Coal Group and unallocated items/ eliminations(2) Total Group
US$M
Profit from operations 2,438 5,788 652 (4,075) 4,803
Exceptional items included in profit from operations(1) − 2,899 − 3,531 6,430
Depreciation and amortisation expense 1,031 971 322 305 2,629
Net (reversal of impairment)/impairment of property, plant and equipment and 4 8 1 3,500 3,513
intangibles
Exceptional items included in Depreciation, amortisation and impairments(1) − − − (3,500) (3,500)
Underlying EBITDA 3,473 9,666 975 (239) 13,875
1 Refer to Exceptional items for further information.
2 Group and unallocated items includes functions, other unallocated
operations, including Potash, Western Australia Nickel, legacy assets and
consolidation adjustments.
Underlying EBITDA - Group and unallocated items
Half year ended 31 December 2024 Profit from operations Exceptional items included in profit from operations(1) Depreciation and amortisation Net (reversal of)/impairments Exceptional items included in Depreciation, amortisation and impairments(1) Underlying EBITDA
US$M
Potash (134) − 1 − − (133)
Western Australia Nickel (623) 320 − (90) 90 (303)
Other(2) (323) 72 261 23 − 33
Total (1,080) 392 262 (67) 90 (403)
Half year ended 31 December 2023 Profit from operations Exceptional items included in profit from operations(1) Depreciation and amortisation Net Exceptional items included in Depreciation, amortisation and impairments(1) Underlying EBITDA
US$M impairments
Potash (130) − 1 − − (129)
Western Australia Nickel (3,740) 3,500 66 3,500 (3,500) (174)
Other(2) (205) 31 238 − − 64
Total (4,075) 3,531 305 3,500 (3,500) (239)
1 Refer to Exceptional items for further information.
2 Other includes functions, other unallocated operations, legacy
assets and consolidation adjustments.
60
BHP | Financial results for the half year ended 31 December 2024
Underlying EBITDA margin
Half year ended 31 December 2024 Copper Iron Ore Coal Group and unallocated items/ Total Group
US$M eliminations(1)
Revenue - Group production 9,235 11,494 2,806 489 24,024
Revenue - Third-party products 1,030 14 − 108 1,152
Revenue 10,265 11,508 2,806 597 25,176
Underlying EBITDA - Group production 4,942 7,185 567 (406) 12,288
Underlying EBITDA - Third-party products 69 2 − 3 74
Underlying EBITDA(2) 5,011 7,187 567 (403) 12,362
Segment contribution to the Group's Underlying EBITDA(3) 39% 56% 5% 100%
Underlying EBITDA margin(4) 54% 63% 20% 51.1%
Half year ended 31 December 2023 Copper Iron Ore Coal Group and unallocated items/ Total Group
US$M eliminations(1)
Revenue - Group production 7,435 14,050 3,786 726 25,997
Revenue - Third-party products 1,223 12 − − 1,235
Revenue 8,658 14,062 3,786 726 27,232
Underlying EBITDA - Group production 3,445 9,667 975 (239) 13,848
Underlying EBITDA - Third-party products 28 (1) − − 27
Underlying EBITDA(2) 3,473 9,666 975 (239) 13,875
Segment contribution to the Group's Underlying EBITDA(3) 25% 68% 7% 100%
Underlying EBITDA margin(4) 46% 69% 26% 53.3%
1 Group and unallocated items includes functions, other unallocated
operations, including Potash, Western Australia Nickel, legacy assets and
consolidation adjustments.
2 We differentiate sales of our production (which may include
third-party product feed) from direct sales of third-party products to better
measure our operational profitability as a percentage of revenue. We may buy
and sell third-party products to ensure a steady supply of product to our
customers where there is occasional production variability or shortfalls from
our assets.
3 Percentage contribution to Group Underlying EBITDA, excluding Group
and unallocated items.
4 Underlying EBITDA margin excludes third-party products.
Effective tax rate
2024 2023
Half year ended 31 December Profit before taxation Income tax expense % Profit before taxation Income tax expense %
US$M US$M US$M US$M
Statutory effective tax rate 8,669 (3,384) 39.0 3,982 (2,276) 57.2
Adjusted for:
Exchange rate movements − 48 − (29)
Exceptional items(1) 762 (96) 6,620 (978)
Adjusted effective tax rate 9,431 (3,432) 36.4 10,602 (3,283) 31.0
1 Refer to Exceptional items for further information.
61
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information derived from Consolidated Cash Flow Statement
Capital and exploration expenditure
Half year ended 31 December 2024 2023
US$M US$M
Capital expenditure (purchases of property, plant and equipment) 5,006 4,545
Add: Exploration and evaluation expenditure 199 199
Capital and exploration expenditure (cash basis) 5,205 4,744
Free cash flow
Half year ended 31 December 2024 2023
US$M US$M
Net operating cash flows 8,317 8,884
Net investing cash flows (5,669) (5,079)
Free cash flow 2,648 3,805
Non-IFRS financial information derived from Consolidated Balance Sheet
Net debt and gearing ratio
31 Dec 2024 31 Dec 2023 30 June 2024
US$M US$M US$M
Interest bearing liabilities - Current 491 2,839 2,084
Interest bearing liabilities - Non-current 19,704 19,565 18,634
Total interest bearing liabilities 20,195 22,404 20,718
Comprising:
Borrowing 17,704 18,826 17,602
Lease liabilities 2,491 3,578 3,116
Less: Lease liability associated with index-linked freight contracts 56 840 511
Less: Cash and cash equivalents 9,560 10,319 12,501
Less: Net debt management related instruments(1) (1,394) (1,183) (1,395)
Less: Net cash management related instruments(2) 180 (220) (19)
Less: Total derivatives included in net debt (1,214) (1,403) (1,414)
Net debt 11,793 12,648 9,120
Net assets 49,597 45,591 49,120
Gearing 19.2% 21.7% 15.7%
1 Represents the net cross currency and interest rate swaps included
within current and non-current other financial assets and liabilities.
2 Represents the net forward exchange contracts related to cash
management included within current and non-current other financial assets and
liabilities.
62
BHP | Financial results for the half year ended 31 December 2024
Net debt waterfall
31 Dec 2024 31 Dec 2023
US$M US$M
Net debt at the beginning of the period (9,120) (11,166)
Net operating cash flows 8,317 8,884
Net investing cash flows (5,669) (5,079)
Net financing cash flows (5,270) (5,983)
Net (decrease)/increase in cash and cash equivalents (2,622) (2,178)
Carrying value of interest bearing liability net repayments/(proceeds) 161 1,324
Carrying value of debt related instruments settlements/(proceeds) 147 −
Carrying value of cash management related instruments (proceeds)/settlements (261) (311)
Fair value change on hedged loans 90 (345)
Fair value change on hedging derivatives (17) 323
Foreign currency exchange rate changes on cash and cash equivalents (317) 74
Lease additions (excluding leases associated with index-linked freight (180) (298)
contracts)
Transfer to liability directly associated with assets held for sale − 69
Other 326 (140)
Non-cash movements (98) (317)
Net debt at the end of the period (11,793) (12,648)
Net operating assets
31 Dec 2024 31 Dec 2023
US$M US$M
Net assets 49,597 45,591
Less: Non-operating assets
Cash and cash equivalents (9,560) (10,319)
Trade and other receivables(1) (10) (12)
Other financial assets(2) (1,648) (1,197)
Current tax assets (728) (446)
Deferred tax assets (61) (76)
Assets held for sale(3) − (1,570)
Add: Non-operating liabilities
Trade and other payables(4) 249 272
Interest bearing liabilities 20,195 22,404
Other financial liabilities(5) 1,521 1,761
Current tax payable 1,048 290
Non-current tax payable 3 39
Deferred tax liabilities 3,537 3,325
Liabilities directly associated with the assets held for sale(3) − 752
Net operating assets 64,143 60,814
1 Represents external finance receivable and accrued interest
receivable included within other receivables.
2 Represents cross currency and interest rate swaps, forward exchange
contracts related to cash management and investment in shares, other
investments, deferred receivable from divestment of subsidiaries and
operations and associated receivables contingent on outcome of future events
relating to realised commodity prices.
3 Represents Blackwater and Daunia assets and liabilities classified
as held for sale as at 31 December 2023 that were subsequently divested on 2
April 2024.
4 Represents accrued interest payable included within other payables.
5 Represents cross currency and interest rate swaps and forward
exchange contracts related to cash management.
63
BHP | Financial results for the half year ended 31 December 2024
Other non-IFRS financial information
Principal factors that affect Revenue, Profit from operations and Underlying EBITDA
The following table describes the impact of the principal factors that
affected Revenue, Profit from operations and Underlying EBITDA for half year
ended 31 December 2024 and relates them back to our Consolidated Income
Statement.
Revenue Total expenses, Other income Profit from operations Depreciation, amortisation Underlying
and Profit/(loss) from equity accounted investments
US$M
US$M and impairments EBITDA
US$M
and Exceptional Items US$M
US$M
Half year ended 31 December 2023
Revenue 27,232
Other income 261
Expenses excluding net finance costs (19,982)
(Loss)/profit from equity accounted investments, related impairments and (2,708)
expenses
Total other income, expenses excluding net finance costs and Profit/(loss) (22,429)
from equity accounted investments, related impairments and expenses
Profit from operations 4,803
Depreciation, amortisation and impairments 6,142
Exceptional item included in Depreciation, amortisation and impairments (3,500)
Exceptional items 6,430
Underlying EBITDA 13,875
Change in sales prices (2,430) − (2,430) − (2,430)
Price-linked costs − 495 495 − 495
Net price impact (2,430) 495 (1,935) − (1,935)
Change in volumes 1,382 (273) 1,109 − 1,109
Operating cash costs − (580) (580) − (580)
Exploration and business development − (10) (10) − (10)
Change in controllable cash costs(1) − (590) (590) − (590)
Exchange rates − 380 380 − 380
Inflation on costs − (335) (335) − (335)
Fuel, energy, and consumable price movements − 67 67 − 67
Non-cash − 66 66 − 66
One-off items − − − − −
Change in other costs − 178 178 − 178
Asset sales − (17) (17) − (17)
Ceased and sold operations (938) 585 (353) − (353)
New and acquired operations − − − − −
Other (70) 165 95 − 95
Depreciation, amortisation and impairments − (40) (40) 40 −
Exceptional items − 5,876 5,876 (5,876) −
Half year ended 31 December 2024
Revenue 25,176
Other income 222
Expenses excluding net finance costs (16,367)
Profit/(loss) from equity accounted investments, related impairments and 95
expenses
Total other income, expenses excluding net finance costs and Profit/(loss) (16,050)
from equity accounted investments, related impairments and expenses
Profit from operations 9,126
Depreciation, amortisation and impairments 2,592
Exceptional item included in Depreciation, amortisation and impairments 90
Exceptional items 554
Underlying EBITDA 12,362
1 Collectively, we refer to the change in operating cash costs and
change in exploration and business development as Change in controllable cash
costs. Operating cash costs by definition do not include non-cash costs. The
change in operating cash costs also excludes the impact of exchange rates and
inflation, changes in fuel, energy costs and consumable costs, changes in
exploration and evaluation and business development costs and one-off items.
These items are excluded so as to provide a consistent measurement of changes
in costs across all segments, based on the factors that are within the control
and responsibility of the segment.
64
BHP | Financial results for the half year ended 31 December 2024
Underlying return on capital employed (ROCE)
31 Dec 2024 31 Dec 2023
US$M US$M
Profit after taxation 5,285 1,706
Exceptional items(1) 666 5,642
Subtotal 5,951 7,348
Adjusted for:
Net finance costs 457 821
Exceptional items included within net finance costs(1) (208) (190)
Income tax expense on net finance costs (106) (187)
Profit after taxation excluding net finance costs and exceptional items 6,094 7,792
Annualised Profit after taxation excluding net finance costs and exceptional 12,188 15,584
items
Net assets at the beginning of the period 49,120 48,530
Net debt at the beginning of the period 9,120 11,166
Capital employed at the beginning of the period 58,240 59,696
Net assets at the end of the period 49,597 45,591
Net debt at the end of the period 11,793 12,648
Capital employed at the end of the period 61,390 58,239
Average capital employed 59,815 58,968
Underlying Return on Capital Employed 20.4% 26.4%
1 Refer to Exceptional items for further information.
Underlying return on capital employed (ROCE) by segment
Half year ended 31 December 2024 Copper Iron Ore Coal Group and unallocated items/ eliminations(1) Total Group
US$M
Annualised profit after taxation excluding net finance costs and exceptional 4,228 8,864 438 (1,342) 12,188
items
Average capital employed 31,938 13,005 6,864 8,008 59,815
Underlying Return on Capital Employed 13% 68% 6% − 20.4%
Half year ended 31 December 2023 Copper Iron Ore Coal Group and unallocated items/ eliminations(1) Total Group
US$M
Annualised profit after taxation excluding net finance costs and exceptional 3,242 12,180 1,032 (870) 15,584
items
Average capital employed 31,029 14,406 6,743 6,790 58,968
Underlying Return on Capital Employed 10% 85% 15% − 26.4%
1 Group and unallocated items includes functions, other unallocated
operations including Potash, Western Australia Nickel (comprising Nickel West
and West Musgrave, both transitioned into temporary suspension in the period
ending Dec-2024), legacy assets and consolidation adjustments.
65
BHP | Financial results for the half year ended 31 December 2024
Underlying return on capital employed (ROCE) by asset
Half year ended 31 December 2024 Western Australia Iron Ore Antamina Escondida Pampa Norte BHP Mitsubishi Alliance Copper South Australia New South Wales Energy Coal(1) Potash(2) Western Australia Nickel(3) Other Total Group
US$M
Annualised profit after taxation excluding net finance costs and exceptional 8,828 500 3,148 330 250 440 212 (302) (750) (468) 12,188
items
Average capital employed 19,855 1,451 10,717 4,280 6,749 15,085 (11) 6,803 110 (5,224) 59,815
Underlying Return on Capital Employed 44% 34% 29% 8% 4% 3% − − − − 20.4%
Half year ended 31 December 2023 Western Australia Iron Ore Antamina Escondida Pampa Norte BHP Mitsubishi Alliance Copper South Australia New South Wales Energy Coal(1) Potash(2) Western Australia Nickel(3) Other Total Group
US$M
Annualised profit after taxation excluding net finance costs and exceptional 12,184 426 2,484 258 822 372 300 (258) (514) (490) 15,584
items
Average capital employed 19,718 1,382 10,693 4,221 6,903 14,462 (338) 4,859 1,648 (4,580) 58,968
Underlying Return on Capital Employed 62% 31% 23% 6% 12% 3% − − (31%) − 26.4%
1 NSWEC ROCE has not been shown as it is distorted by negative
capital employed due to the rehabilitation provision being the primary balance
remaining on Balance Sheet following previous impairments.
2 Potash ROCE has not been shown because it is distorted as the asset
is non-producing and in its development phase.
3 Western Australia Nickel ROCE has not been shown following
transition into temporary suspension.
Unit costs
Unit costs do not include the re-allocation to assets in HY2025 of the costs
associated with the employee entitlements and allowances review conducted in
FY2023, which were reported in Group and Unallocated in that period.
The calculation of Escondida, Spence and Copper South Australia unit costs are
set out in the tables below.
Escondida unit costs Spence unit costs
US$M H1 FY2025 H1 FY2024 H1 FY2025 H1 FY2024
Revenue 5,828 4,427 1,254 1,029
Underlying EBITDA 3,468 2,347 565 428
Gross costs 2,360 2,080 689 601
Less: by-product credits 336 248 64 49
Less: freight 120 89 29 22
Less: Government royalties 58 − − −
Net costs 1,846 1,743 596 530
Sales (kt) 629 523 135 121
Sales (Mlb) 1,387 1,152 297 268
Cost per pound (US$)(1) 1.33 1.51 2.01 1.98
1 H1 FY25 based on average realised exchange rates of USD/CLP 947 (H1
FY24 USD/CLP 874).
66
BHP | Financial results for the half year ended 31 December 2024
Copper South Australia
unit costs
US$M H1 FY2025 H1 FY2024
Revenue 2,083 1,853
Underlying EBITDA 742 591
Gross costs 1,341 1,262
Less: by-product credits 728 596
Less: freight 15 28
Less: Government royalties 70 65
Less: re-allocation of costs associated with the employee entitlements and 1 11
allowances review
Net costs 527 562
Sales (kt) 152 154
Sales (Mlb) 335 340
Cost per pound (US$)(1) 1.57 1.65
1 H1 FY25 based on an average realised exchange rate of AUD/USD 0.66
(H1 FY24 AUD/USD 0.65).
The calculation of WAIO unit costs is set out in the table below.
WAIO unit costs
US$M H1 FY2025 H1 FY2024
Revenue 11,430 13,991
Underlying EBITDA 7,140 9,646
Gross costs 4,290 4,345
Less: freight 1,152 979
Less: Government royalties 796 992
Less: re-allocation of costs associated with the employee entitlements and 18 33
allowances review
Net costs 2,324 2,341
Sales (kt, equity share) 127,749 126,786
Cost per tonne (US$)(1) 18.19 18.46
1 H1 FY25 based on an average realised exchange rate of AUD/USD 0.66
(H1 FY24 AUD/USD 0.65).
The calculation of BMA unit costs is set out in the table below.
BMA unit costs
US$M H1 FY2025 H1 FY2024
Revenue 1,853 2,882
Underlying EBITDA 391 810
Gross costs 1,462 2,072
Less: freight 14 14
Less: Government royalties 291 631
Less: re-allocation of costs associated with the employee entitlements and 1 4
allowances review
Net costs 1,156 1,423
Sales (kt, equity share) 8,999 11,031
Cost per tonne (US$)(1) 128.46 129.00
1 H1 FY25 based on an average realised exchange rate of AUD/USD 0.66
(H1 FY24 AUD/USD 0.65).
67
BHP | Financial results for the half year ended 31 December 2024
Definition and calculation of Non-IFRS financial information
Non-IFRS financial information Reasons why we believe the non-IFRS financial information are useful Calculation methodology
Underlying attributable profit Allows the comparability of underlying financial performance by excluding the Profit after taxation attributable to BHP shareholders excluding any
impacts of exceptional items and is also the basis on which our dividend exceptional items attributable to BHP shareholders.
payout ratio policy is applied.
Underlying basic earnings per share On a per share basis, allows the comparability of underlying financial Underlying attributable profit divided by the weighted basic average number of
performance by excluding the impacts of exceptional items. shares.
Underlying EBITDA Used to help assess current operational profitability excluding the impacts of Earnings before net finance costs, depreciation, amortisation and impairments,
sunk costs (i.e. depreciation from initial investment). Each is a measure that taxation expense, Discontinued operations and exceptional items. Underlying
management uses internally to assess the performance of the Group's segments EBITDA includes BHP's share of profit/(loss) from investments accounted for
and make decisions on the allocation of resources. using the equity method including net finance costs, depreciation,
amortisation and impairments and taxation expense/(benefit).
Underlying EBITDA margin Underlying EBITDA excluding third party product EBITDA, divided by revenue
excluding third party product revenue.
Underlying EBIT Used to help assess current operational profitability excluding net finance Earnings before net finance costs, taxation expense, Discontinued operations
costs and taxation expense (each of which are managed at the Group level) as and any exceptional items. Underlying EBIT includes BHP's share of
well as Discontinued operations and any exceptional items. profit/(loss) from investments accounted for using the equity method including
net finance costs and taxation expense/(benefit).
Profit from operations Earnings before net finance costs, taxation expense and Discontinued
operations. Profit from operations includes Revenue, Other income, Expenses
excluding net finance costs and BHP's share of profit/(loss) from investments
accounted for using the equity method including net finance costs and taxation
expense/(benefit).
Capital and exploration expenditure Used as part of our Capital Allocation Framework to assess efficient Purchases of property, plant and equipment and exploration and evaluation
deployment of capital. Represents the total outflows of our operational expenditure.
investing expenditure.
68
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information Reasons why we believe the non-IFRS financial information are useful Calculation methodology
Free cash flow It is a key measure used as part of our Capital Allocation Framework. Reflects Net operating cash flows less net investing cash flows.
our operational cash performance inclusive of investment expenditure, which
helps to highlight how much cash was generated in the period to be available
for the servicing of debt and distribution to shareholders.
Non-IFRS financial information Reasons why we believe the non-IFRS financial information are useful Calculation methodology
Net debt Net debt shows the position of gross debt less index-linked freight contracts Interest bearing liabilities less liability associated with index-linked
offset by cash immediately available to pay debt if required and any freight contracts less cash and cash equivalents less net cross currency and
associated derivative financial instruments. Liability associated with interest rate swaps less net cash management related instruments for the Group
index-linked freight contracts, which are required to be remeasured to the at the reporting date.
prevailing freight index at each reporting date, are excluded from the net
debt calculation due to the short-term volatility of the index they relate to
not aligning with how the Group uses net debt for decision making in relation
to the Capital Allocation Framework. Net debt includes the fair value of
derivative financial instruments used to hedge cash and borrowings to reflect
the Group's risk management strategy of reducing the volatility of net debt
caused by fluctuations in foreign exchange and interest rates.
Net debt, along with the gearing ratio, is used to monitor the Group's capital
management by relating net debt relative to equity from shareholders.
Gearing ratio Ratio of Net debt to Net debt plus Net assets.
Net operating assets Enables a clearer view of the assets deployed to generate earnings by Operating assets net of operating liabilities, including the carrying value of
highlighting the net operating assets of the business separate from the equity accounted investments and predominantly excludes cash balances, loans
financing and tax balances. This measure helps provide an indicator of the to associates, interest bearing liabilities, derivatives hedging our net debt,
underlying performance of our assets and enhances comparability between them. assets held for sale, liabilities directly associated with assets held for
sale and tax balances.
69
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information Reasons why we believe the non-IFRS financial information are useful Calculation methodology
Underlying return on capital employed (ROCE) Indicator of the Group's capital efficiency and is provided on an underlying Profit after taxation excluding exceptional items and net finance costs (after
basis to allow comparability of underlying financial performance by excluding taxation) divided by average capital employed.
the impacts of exceptional items.
Profit after taxation excluding exceptional items and net finance costs (after
taxation) is profit after taxation excluding exceptional items, net finance
costs and the estimated taxation impact of net finance costs. These are
annualised for a half year end reporting period.
The estimated tax impact is calculated using a prima facie taxation rate on
net finance costs (excluding any foreign exchange impact).
Average capital employed is calculated as the average of net assets less net
debt for the last two reporting periods.
Adjusted effective tax rate Provides an underlying tax basis to allow comparability of underlying Total taxation expense/(benefit) excluding exceptional items and exchange rate
financial performance by excluding the impacts of exceptional items. movements included in taxation expense/(benefit) divided by Profit before
taxation excluding exceptional items.
Unit costs Used to assess the controllable financial performance of the Group's assets Ratio of net costs of the assets to the equity share of sales tonnage. Net
for each unit of production. Unit costs are adjusted for site specific costs is defined as revenue less Underlying EBITDA and excludes freight,
non-controllable factors to enhance comparability between the Group's assets. re-allocation of the costs associated with the employee entitlements and
allowance review in FY2023, and other costs, depending on the nature of each
asset. Freight is excluded as the Group believes it provides a similar basis
of comparison to our peer group. The re-allocation to assets in FY2024 and
FY2025 of the costs associated with the employee entitlements and allowances
review in FY2023 are excluded in asset unit costs as these costs were already
recognised in Group and Unallocated in FY2023.
70
BHP | Financial results for the half year ended 31 December 2024
Non-IFRS financial information Reasons why we believe the non-IFRS financial information are useful Calculation methodology
Escondida, Spence and Copper South Australia unit costs exclude:
· by-product credits being the favourable impact of by-products (such
as gold or silver) to determine the directly attributable costs of copper
production.
· government royalties, as these are costs that are not deemed to be
under the Group's control and the Group believes exclusion provides a similar
basis of comparison to our peer group.
WAIO and BMA unit costs exclude:
government royalties, as these are costs that are not deemed to be under the
Group's control and the Group believes exclusion provides a similar basis of
comparison to our peer group.
Non-IFRS Financial Information
Half year ended
31 December 2024
71
BHP | Financial results for the half year ended 31 December 2024
Definition and calculation of principal factors
The method of calculation of the principal factors that affect the period on
period movements of Revenue, Profit from operations and Underlying EBITDA are
as follows:
Principal factor Method of calculation
Change in sales prices Change in average realised price for each operation from the prior period to
the current period, multiplied by current period sales volumes.
Price-linked costs Change in price-linked costs (mainly royalties) for each operation from the
prior period to the current period, multiplied by current period sales
volumes.
Change in volumes Change in sales volumes for each operation multiplied by the prior year
average realised price less variable unit cost.
Controllable cash costs Total of operating cash costs and exploration and business development
costs.
Operating cash costs Change in total costs, other than price-linked costs, exchange rates,
inflation on costs, fuel, energy, and consumable price movements, non-cash
costs and one-off items as defined below for each operation from the prior
period to the current period.
Exploration and evaluation and business development Exploration and evaluation and business development expense in the current
period minus exploration and business development expense in the prior period.
Exchange rates Change in exchange rate multiplied by current period local currency revenue
and expenses.
Inflation on costs Change in inflation rate applied to expenses, other than depreciation and
amortisation, price-linked costs, exploration and business development
expenses, expenses in ceased and sold operations and expenses in new and
acquired operations.
Fuel, energy, and consumable price movements Fuel and energy expense and price differences above inflation on consumables
in the current period minus fuel and energy expense in the prior period.
Non-cash Change in net impact of capitalisation and depletion of deferred stripping
from the prior period to the current period.
One-off items Change in costs exceeding a pre-determined threshold associated with an
unexpected event that had not occurred in the last two years and is not
reasonably likely to occur within the next two years.
Asset sales Profit/(loss) on the sale of assets or operations in the current period minus
profit/(loss) on sale of assets or operations in the prior period.
Ceased and sold operations Underlying EBITDA for operations that ceased (including temporary suspension)
or were sold in the current period minus Underlying EBITDA for operations that
ceased (including temporary suspension) or were sold in the prior period.
New and acquired operations Underlying EBITDA for operations that were acquired in the current period
minus Underlying EBITDA for operations that were acquired in the prior period.
Share of profit/(loss) from equity accounted investments Share of profit/(loss) from equity accounted investments for the current
period minus share of profit/(loss) from equity accounted investments in the
prior period.
Other Variances not explained by the above factors.
72
1 (#_ftnref1) Data includes former OZL (except Brazil), and Blackwater and
Daunia mines until 2 April 2024, except where specified otherwise.
2 (#_ftnref2) Combined employee and contractor frequency per 1 million hours
worked. FY24 data restatements for HPIF and TRIFR restated due to ongoing
verification activities resulting in updated recordable injury and exposure
hour data.
3 (#_ftnref3) Our operational GHG emissions are the Scopes 1 and 2 emissions
from our operated assets. Baseline year data and performance data from FY24
have been adjusted for divestment of our interest in BMC (completed on 3 May
2022), divestment of our Petroleum business (merger with Woodside completed on
1 June 2022), BMA's divestment of the Blackwater and Daunia mines (completed
on 2 April 2024), our acquisition of OZ Minerals (completed on 2 May 2023) and
for methodology changes (use of IPCC Assessment Report 5 (AR5) Global Warming
Potentials and the transition to a facility-specific GHG emission calculation
methodology for fugitives at Caval Ridge and Saraji South). This provides the
data most relevant to assessing progress against our operational GHG emissions
medium-term target and differs from annual total operational GHG emissions
inventory (unadjusted for acquisitions, divestments and methodology changes).
4 (#_ftnref4) Baseline year data and performance data have been adjusted to
only include voyages associated with the transportation of commodities
currently in BHP's portfolio due to the data availability challenges of
adjusting by asset or operation for CY08 and subsequent year data. GHG
emissions intensity calculations currently include the transportation of
copper, iron ore, steelmaking coal, energy coal, molybdenum, uranium and
nickel. Baseline year data and performance data have also been adjusted for a
methodology change to use maritime transport emission factors from EU
Regulation 2023/1805, after The British Standards Institution EN 16258
standard (the source of the emission factors we previously used) was withdrawn
in CY23.
5 (#_ftnref5) Includes former OZL (except Brazil) for HY25 only.
6 (#_ftnref6) Based on a 'point in time' snapshot of employees as at the end
of the relevant reporting period.
7 (#_ftnref7) We define gender balance as a minimum 40% women and 40% men in
line with the definitions used by entities such as the International Labour
Organization.
8 (#_ftnref8) Includes some but not all former OZL reflecting progressive
migration of employee data onto BHP systems.
9 (#_ftnref9) Indigenous employee participation for Australia is at Minerals
Australia operations; for Chile is at Minerals Americas operations in Chile;
and for Canada is at the Jansen Potash project and operations in Canada.
10 (#_ftnref10) Indigenous employee representation in Australia, is at
Minerals Australia operations and includes some but not all former OZL
(operational and non-operational roles) reflecting progressive migration of
employee data onto BHP systems.
11 (#_ftnref11) Nature-positive management practices refer to an area under
stewardship that has a formal management plan that includes conservation,
restoration or regenerative practices. This metric is measured on an annual
basis and an update will be provided in the full year results for FY25.
12 (#_ftnref12) 'Land and water we steward' excludes areas we hold under
greenfield exploration licenses (or equivalent tenements), which are outside
the area of influence of our existing mine operations.
1 USD amounts reflect those included in the announcement of the settlement
agreement calculated based on actual transactional (historical) exchange rates
related to funding provided to Fundação Renova for investment to date with
future spend calculated using the 28 June 2024 BRL/USD exchange rate of 5.56.
i (#_ednref1) Copper equivalent production for major
commodities including copper, iron ore and coal, excluding the now divested
Blackwater and Daunia mines and WAN which has entered temporary suspension.
Calculated based on FY24 average realised prices.
ii (#_ednref2) Data includes former OZL (except Brazil)
iii (#_ednref3) We use various non-IFRS financial information
to reflect our underlying performance. For further information on the
reconciliations of certain non-IFRS financial information measures to our
statutory measures, reasons for usefulness and calculation methodology, please
refer to non-IFRS financial information
iv (#_ednref4) Production increased 14%, excluding production
from the now divested Blackwater and Daunia mines.
v (#_ednref5) Calculated on a copper equivalent production
weighted average basis, based on FY24 average realised prices.
vi (#_ednref6) On a total operations basis. Twenty-year
average includes all half-year reporting periods from H2 FY05 to H1 FY25
(inclusive).
vii (#_ednref7) Maintenance capital includes non-discretionary
spend for the following purposes: deferred development and production
stripping; risk reduction; compliance and asset integrity.
viii (#_ednref8) Subject to movements in exchange rates.
ix (#_ednref9) With respect to Group capital and exploration
expenditure, medium term refers to the average for FY27-FY29.
x (#_ednref10) Calculated using Net Debt as at 31 December
2024 and EBITDA for the last twelve months (CY24).
xi (#_ednref11) Credit ratings are forward-looking opinions
on credit risk. Moody's and Fitch's credit ratings express the opinion of each
agency on the ability and willingness of BHP to meet its financial obligations
in full and on time. A credit rating is not a recommendation to buy, sell or
hold securities and may be subject to suspension, reduction or withdrawal at
any time by an assigning rating agency. Any credit rating should be evaluated
independently of any other information.
xii (#_ednref12) 10% increase in copper production from H1 FY24
(894 kt) to H1 FY25 (987 kt). 19% increase in copper production from FY22
(1,574 kt) to FY24 (1,865 kt).
xiii (#_ednref13) The pathway to increase potential production at
Copper South Australia is subject to the development of an integrated asset
plan, regulatory approvals, market capacity and, in certain cases, the
development of exploration assets, which factors are uncertain. The pathway
represents our current aspiration for Copper South Australia, and is not
intended to be a projection, forecast or production target. Copper equivalent
production includes potential increases in production rates and contribution
from by-products, as well as potential impacts from our exploration program.
Copper equivalent production is calculated using 2024 long term (real)
consensus prices as at June 2024 of US$4.50/lb for copper, US$1,819/oz for
gold, US$23/oz for silver and US$64/lb for uranium.
xiv (#_ednref14) Based on CY24 production.
xv (#_ednref15) Represents our current aspiration for BHP group
attributable copper production, and not intended to be a projection, forecast
or production target. Includes potential increases in production rates, as
well as potential from non-operated joint ventures as well as exploration
programs. The pathway is subject to the completion of technical studies to
support Mineral Resource and Ore Reserves estimates, capital allocation,
regulatory approvals, market capacity, and, in certain cases, the development
of exploration assets, in which factors are uncertain.
xvi (#_ednref16) FY25 and medium-term unit cost guidance is based
on an exchange rate of AUD/USD 0.66.
xvii (#_ednref17) Subject to movements in exchange rates; +/- 50%
in any given year.
xviii (#_ednref18) All financial obligations are presented on a real,
undiscounted, 100% basis and will accrue inflation at IPCA inflation rate.
Payments will be made in Brazilian Reais. USD amounts are calculated using 31
December 2024 BRL/USD exchange rate of 6.19.
xix (#_ednref19) Relates to refined nickel metal only. Excludes
intermediate products and nickel sulphate.
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