BHP FY21 Results Climb, Says Positive On View; To Merge Petroleum Business With Woodside

BHP Group Plc Tuesday reported significantly higher fiscal 2021 results. Looking ahead, the Anglo-Australian miner said the outlook for the short term remains uncertain, but outlook remains positive for long-term global economic growth and commodity demand.

Separately, BHP announced its deal with Australia’s Woodside Petroleum Ltd. to combine their respective oil and gas portfolios. Under an all-stock merger, BHP’s oil and gas business would merge with Woodside, and Woodside would issue new shares to be distributed to BHP shareholders.

Following the deal closure, the existing Woodside shareholders will own 52 percent of the expanded Woodside, while existing BHP shareholders will own the remaining 48 percent. The combined business will be led by Meg O’Neill as CEO. The merger is expected to be completed in second quarter of calendar year 2022.

BHP also plans to unify its dual listed corporate structure under existing Australian parent company to reduce duplication and streamline governance and internal processes. Plc shareholders’ shares will be exchanged for Limited shares on a one-for-one basis. The unification is anticipated to occur in the first half of calendar year 2022, with the proposed deal with Woodside to follow.

Further, BHP said it has approved $5.7 billion or C$7.5 billion in capital expenditure for the Jansen Stage 1 potash project in the province of Saskatchewan, Canada. Jansen S1 is anticipated to produce approximately 4.35 million tonnes of potash per annum. First ore is targeted in the 2027 calendar year, with construction expected to take approximately six years, followed
by a ramp up period of two years. The potash project will create at least 3,500 jobs during peak construction and 600 in operation.

Following its strong fiscal 2021 results, BHP Board has determined to pay a final dividend of $2.00 per share or $10.1 billion, which includes an additional amount of $0.91 per share above the 50 percent minimum payout policy. In total, dividends of $15.2 billion or $3.01 per share have been determined for the 2021 financial year.

For fiscal 2021, BHP’s profit before tax increased to $24.60 billion from $13.51 billion last year. Attributable profit was $11.30 billion, up 42 percent from last year’s $7.96 billion. Basic earnings per share improved to 223.5 cents from 157.3 cents a year ago.

The latest results mainly included an exceptional loss of $5.8 billion predominantly related to the impairments of potash and energy coal assets, and the current year impact of the Samarco dam failure.

Underlying attributable profit was $17.08 billion, compared to $9.06 billion last year, reflecting higher commodity prices and strong operational performance. Underlying basic earnings per share were 337.7 cents, compared to 179.2 cents last year.

For the year 2021, profit from operations climbed 80 percent to $25.91 billion, and underlying EBITDA grew 64 percent to $37.4 billion.

Fiscal-year revenue from continuing operations increased to $60.82 billion from $42.93 billion last year.

In London, BHP shares were trading at 2,381 pence, up 4.41 percent.

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