Mining

BHP warns of economic and trade risks if COVID-19 is not contained by March

THE coronavirus (COVID-19) outbreak could hurt commodity demand if it wasn’t contained by March, said BusinessLive citing BHP, the Australian miner.

Principally aimed at explaining its caution in respect of the interim dividend for the six months ended December 31, BHP said COVID-19 and other geopolitical shocks had given the group cause for caution in the markets.

BHP declared an interim dividend of 65 US cents, the second-highest dividend it has announced, but with the payout ratio falling to 63% from 75% in the prior comparative period. BHP’s policy is to pay out at least 50% of underlying attributable profit, referring to profits received rather than profits accounted for on the balance sheet, said BusinessLive.

It reported a 13.6% rise in profit from operations to $8.3bn to end-December, saying it benefited from higher iron ore prices, operational stability, and favourable exchange rate movements. Underlying attributable profit rose 29% to $5.18bn.

BHP said should the coronavirus outbreak not be contained within the March quarter, it expected to revise its economic and commodity demand growth downwards, though the effect on commodities may differ.

“In this regard, we highlight the distinction between a permanent loss of demand in oil due to foregone transport services; and temporary demand losses with the opportunity to be reclaimed, as in steel and copper end-use,” the miner said.

“Despite near term uncertainty — due to the coronavirus outbreak, trade policy and geopolitics — we remain convinced about the positive underlying fundamentals of our commodities,” said CEO Mike Henry.

The post BHP warns of economic and trade risks if COVID-19 is not contained by March appeared first on Miningmx.

Source: miningmx.com

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