SYDNEY: BHP Group on Tuesday (Aug 22) reported its lowest annual profit in three years and warned that lag effects of higher interest rates would impact growth in the developed world in fiscal 2024, although China and India “remained robust”.

BHP also warned of inflationary pressures to continue to impact the business in fiscal 2024, with the cost of mining now estimated to be above the pre-pandemic levels.

“In the near term, while the outlook for the developed world is uncertain, we expect China and India to remain relative sources of stability for commodity demand,” the world’s largest listed miner said.

“More broadly, there is increased recognition of the importance of critical minerals and strategies across the globe to incentives investment in supply and demand, which provides opportunities and challenges.”

Over the past year, prices for iron ore – BHP’s top revenue-generating commodity – retreated from peaks scaled over the past two years owing to a weak Chinese economy and factory activity, with surging costs and a tight labour market in Australia further hurting earnings.

As a result, the company’s underlying attributable profit for the year ended June 30 fell to US$13.42 billion (RM62.42 billion) from US$21.32 billion a year earlier, marginally missing a Refinitiv estimate of US$13.89 billion.

The world’s largest listed miner declared a final dividend of US$0.80 per share, down from US$1.75 per share a year ago. – Reuters