SYDNEY (AFP) – Anglo-Australian mining giant BHP yesterday reported a lower-than-expected USD3.73 billion half-yearly profit, as it warned of a softening Chinese market and growing trade rows.
The underlying profit for the six months to December 31 was eight per cent lower than the USD4.05 billion recorded in the previous corresponding period, missing market expectations after a series of operational problems at its mines.
“It’s a soft result,” Fat Prophets resources analyst David Lennox told AFP of the first-half result, adding that a pullback in commodity prices was also a factor.
BHP Chief Executive Andrew Mackenzie said a “strong second half is expected to partially offset the impacts from operational outages in the first half”.
They included production outages because of a major train derailment at its Western Australia iron ore operations, an outage at its copper mine in South Australia and a fire at a Chilean facility.
The miner said it expected global growth to be slightly softer in 2019, with further escalation in trade protectionism a “downside risk”.
BHP also expected China’s economic growth to “slow modestly” this year, with weaker exports partially offset by easier monetary and fiscal policy.
But surging iron ore prices could provide a windfall for the second-half of the financial year.
Prices have recently risen substantially thanks to a drop in supply from Vale’s Brazilian operations, which were affected by a fatal dam collapse.