Safe, reliable production
There have been no fatalities at BHP for over three-and-a-half-years. High-potential injury frequencyi declined by
30% during the year.
Our strong focus on safety and health includes the elimination from BHP of sexual harassment, racism and bullying.
We have made strong progress during the year on implementing our suite of critical controls, including increased
security measures, and implementing an alcohol consumption limit across our Minerals Australia villages. We have
also held safety stops across our global workforce focused on preventing this behaviour.
We achieved our short-term target to maintain operational greenhouse gas emissions at or below 2017 financial year
levels while we continue to grow our business.
We launched our new social value framework and scorecard that outlines our 2030 goals, metrics and milestones.
Operational excellence: Record sales at Western Australia Iron Ore (WAIO) and record free cash flow generation
Reliable operational performance at WAIO, with record sales (on a 100% basis) for the third consecutive year and
the South Flank Project ramp up ahead of schedule.
Escondida achieved record material mined and near-record concentrator throughput.
Profit from operations of US$34.1 billion, up 34% from the prior year, and record Underlying EBITDAii of
US$40.6 billion at a record marginii of 65% for continuing operations.
Attributable profit of US$30.9 billion and record Underlying attributable profitii of US$23.8 billion, up 39% from the
prior year for total operations.
Net operating cash flow of US$29.3 billion and record free cash flowii of US$24.3 billion for continuing operations,
reflects higher coal and copper prices and disciplined cost control.
We paid US$17.3 billion in tax, royalty and other payments to governments in the 2022 financial year.
iii
Disciplined capital allocation: Production shafts at Jansen complete and Jansen Stage 1 progressing to plan
Capital and exploration expenditure of US$6.1 billion for continuing operations. Capital and exploration expenditure
is expected to be approximately US$7.6 billion and US$9.0 billion for the 2023 and 2024 financial years.
The Jansen Stage 1 project is tracking to plan and we are working to bring forward first production into 2026, while
also assessing options to accelerate Jansen Stage 2.
At WAIO we have revised medium-term production guidance to greater than 300 Mtpa and we are assessing
330 Mtpa expansion alternatives.
In exploration, we continue to advance copper targets in a number of countries as well as our nickel exploration
programs in Canada and Australia.
Net debtii at US$0.3 billion, compared to US$4.1 billion at 30 June 2021.
Value and returns: Record US$36.0 billion of total announced returns to shareholders
The Board has determined to pay a final dividend of US$1.75 per share or US$8.9 billion, which includes an additional
amount of US$0.60 per share (equivalent to US$3.0 billion) above the 50% minimum payout policy. Total cash
dividends announced of US$3.25 per share, equivalent to a 77% payout ratio.
The merger of BHP’s Petroleum business with Woodside Energy was completed on 1 June 2022 and BHP paid a
fully franked in specie dividend of US$3.86 per share or US$19.6 billion.
The divestment of BHP’s 80% interest in BMC was completed on 3 May 2022.
The unification of BHP’s dual listed corporate structure was completed in January 2022.
Underlying return on capital employedii strengthened to 48.7%.
BHP Chief Executive Officer, Mike Henry:
“BHP delivered strong operational performance and disciplined cost control to realise record underlying earnings of
US$40.6 billion and record free cash flow of US$24.3 billion. We have reduced debt and announced a final dividend of
US$1.75 per share, bringing total cash dividends announced for the full year to a record US$3.25 per share.
BHP’s total economic contribution including payments to employees, suppliers, communities, governments and
shareholders totalled US$78.1 billion. This includes US$17.3 billion paid to governments through taxes and royalties
and US$19.6 billion paid to shareholders after the merger of our Petroleum business with Woodside.
These strong results were due to safe and reliable operations, project delivery and capital discipline, which allowed us
to capture the value of strong commodity prices. BHP remains the lowest cost iron ore producer globally and we
delivered record annual sales from Western Australia Iron Ore.
I am most proud of our safety performance: BHP has now achieved three-and-a-half years without a fatality and the rate
of high-potential injuries has dropped by a third in the past 12 months. We continue to make progress in building
inclusive, diverse and high-performing teams and culture, and we remain unwavering in our focus on eliminating sexual
harassment, bullying and racism from BHP.
BHP enters the 2023 financial year in great shape strategically, operationally and financially, and well prepared to
manage an uncertain near-term environment. During the year, we unified BHP’s corporate structure, merged our
Petroleum business with Woodside, completed the sales of our interests in the BMC and Cerrejón energy coal assets,
and decided to retain and operate our New South Wales Energy Coal business until mine closure in 2030. We have
improved our platform for growth through the Jansen potash project, iron ore and copper.
We are pursuing options to deliver greater value for shareholders by growing the business and our exposure to futurefacing commodities. At Western Australia Iron Ore, the ramp-up of South Flank is ahead of schedule and we have
revised our medium-term production guidance to more than 300 Mtpa. In the 2023 financial year, we are assessing
expansion alternatives to take us toward 330 Mtpa of production.
In Canada, we completed the production shafts at our Jansen potash project and are working to bring forward first
production into 2026, as we assess options to accelerate Stage 2. At the same time, we continue to assess and add to
our options in copper and nickel.
We expect China to emerge as a source of stability for commodity demand in the year ahead, with policy support
progressively taking hold. At the same time, we expect to see a slowdown in advanced economies as monetary policy
tightens, as well as ongoing geopolitical uncertainty and inflationary pressures. The direct and indirect impacts of
Europe’s energy crisis are a particular point of concern. Tight labour markets will remain a challenge for global and local
supply chains. Waves of COVID-19 infection continue to occur in the communities where we operate, and we are
planning accordingly.”
And later;
Dividends
On 1 June 2022, the merger of BHP’s Petroleum business with Woodside was completed. BHP paid a fully franked
in specie dividend and distributed Woodside shares to eligible BHP shareholders. The implied value of the in specie
dividend was US$19.6 billion or US$3.86 per BHP share.
We will pay a final dividend of US$1.75 per share or US$8.9 billion, including an additional amount of US$3.0 billion
above the minimum payout policy. This is equivalent to a 76 per cent payout ratioii (2021: 92 per cent).
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Ian.