Business Overview
BHP Group Plc (LON: BHP) is one of the world's renowned resource company. The company is engaged in the operations of extraction and processing of minerals, gas and oil. The company is having an employee base of 62,000, including contractors, mainly in the Americas and Australia. 

Operational Update
On 21st January 2020, BHP group announced its operational review for the first half of the financial year 2019 ending 31st December. Based on exchange rates of USD/CLP of  683 and AUD/USD of 0.70, the company’s production and unit cost guidance remained the same for FY2020. Driven by higher by-product credits, the company’s Escondida unit costswere below-set targets for H1 FY2019. The production for copper equivalentremained same for H1 FY2019, while the volumesfor FY2019 is expected to be above FY2018 data.The company’s third phasedrilling activities at Oak Damfor copper explorationin Southern Australia are progressing as planned and are expected to complete in June 2020.

Financial Highlights – Financial Year 2019 (30th June 2019, USD, Million)
In the financial year ending 30th June 2019, the company’s revenue was at $44,288 million versus $43,129 million in the FY2018. The increase in revenue was driven by an increase in the revenue generated from the sale of copper. The company’s underlying EBITDA stood at $23,158 million in FY2019 versus $23,183 million in FY2018. The company’s operating profit was at $16,113 million in FY2019 versus $15,996 million in FY2018. The PBT (Profit before tax) for FY2019 stood at $15,049 million as against $14,751 million in FY2018. The Profit after tax (continuing and discontinued operations) for FY2019 stood at $9,185 million as against $4,823 million in FY2018. The Profit after tax attributable to shareholders (continuing and discontinued operations) surged by 124 per cent to $8,306 million in FY2019 from $3,705 million in FY2018. The basic earnings per share surged by 130 per cent to 160.3 cents in FY2019 from 69.6 cents in FY2018. The company’s diluted earnings per share stood at 159.9 cents in FY2019 versus 69.4 cents in FY2018. The company’s dividend per share was up by 13 per cent to 133 cents in FY2019 from 118 cents in FY2018.

Share Price Performance

Daily Chart as of  January 21^st, 2020, before the market close (Source: Thomson Reuters)

BHP Group Plc shares were trading at GBX 1,803.00 at the time of writing before the market close (at 12:41 PM GMT) on 21^st January 2020 and were down by 2.07 versus the previous day closing price. Stock's 52 weeks High is GBX 2,078.50 and Low is GBX 1,554.60.The shares of the company have delivered a positive return of 11.44 per cent in the last quarter. The company’s stock has given investors 0.18 per cent of a negative return in the last week.

Conclusion
The company has shown decent financial performance in the current financial year 2019 as compared to the same period of the last year. Both the top-line and the bottom-line performance have improved for the current period. The company has entered the FY2020 period with strong positive momentum in terms of volume and cost. The global economy has grown by 3¾ per cent in the calendar year 2018, with both the US economy and the Chinese economy showing growth. The steel production has maintained strong growth in H1 of FY2019 globally. The company is rapidly expanding its operations in the US and China and is offsetting weakness in Japan and Europe.

Based on the above rationale, we have given a "HOLD" recommendation at the current price of GBX 1,793.00 (as on 21^st January 2020, before the market close at 10:35 AM GMT).

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.