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Speaker 1: Welcome to the Fearing Greed Business Interview. I'm sure ailman.

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Speaker 1: BHP this week turned in a disappointing underlying profit of

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Speaker 1: eight billion dollars for the second half of last year.

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Speaker 1: It also cut its dividend to its lowest level in

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Speaker 1: eight years, with weaker demand for steel out of China

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Speaker 1: hurting BHP's iron ore exports, but increasingly for BHP at least,

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Speaker 1: the future is in copper, a theme that certainly comes

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Speaker 1: through in today's interview with Vendita Pant, BHP's chief financial officer.

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Speaker 1: She spoke this week to our partners at Osby's, Australia's

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Speaker 1: leading provider of live and on demand video of the

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Speaker 1: latest news in Australian business markets, economy and startups. Sign

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Speaker 1: up for free at osbiz dot com today.

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Speaker 2: You well, let's get more into those results than Vanditta,

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Speaker 2: because underlying profit was down twenty three percent and your

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Speaker 2: dividend at an eight year low, in fact the bare

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Speaker 2: minimum in your shareholder policy. Can you took us through

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Speaker 2: why that is?

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Speaker 3: Yeah, let me talk through the results, Juliet. Financially and operationally,

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Speaker 3: both very strong performance from an operations perspective. Volume was

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Speaker 3: up five person and as I was saying, cost down

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Speaker 3: four percent at unit cost level, Western Australia IO continued

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Speaker 3: to be their leading iron ore business in the world

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Speaker 3: BM in Queensland production up fourteen percent and copper. This

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Speaker 3: half grow ten person, contributing forty person to a bidder.

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Speaker 3: All that delivered a net operating cash flow of more

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Speaker 3: than eight billion dollars this half, which on run rate

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Speaker 3: basis is more than fifteen billion that we have generated

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Speaker 3: in all bar one of the past fifteen years. This

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Speaker 3: stability is really the hallmark for BHP and really valued

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Speaker 3: by our inn investors. The dividends that we have declared

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Speaker 3: our fifty US sins per share that's seventy nine pussy

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Speaker 3: dollars cents, that is two and a half billion US dollars,

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Speaker 3: and we have continued to prosecute on our attractive organic

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Speaker 3: growth options. From a dividend perspective, I would say since

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Speaker 3: our capitalized location policy was put in place around eighty

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Speaker 3: years back, we have returned eighty three billion US dollars

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Speaker 3: in cash returns to our shareholders. But equally, we are

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Speaker 3: a long term company and so are shareholders, and on

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Speaker 3: their behalf, we are investing in growth on commodities like copper.

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Speaker 3: Like I mentioned, while yo continues to be a fantastic

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Speaker 3: business for US with lowest cost in the industry for

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Speaker 3: the fifth year in running, we also have a copper

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Speaker 3: growth now coming through in these results with forty percent

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Speaker 3: a bitter contribution. And this is just the start, because

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Speaker 3: we have a fantastic area of very attractive investment opportunities

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Speaker 3: for copper here in Australia, in Chile, Argentina and in

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Speaker 3: the US and all that we are going to be

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Speaker 3: investing in for value for our shareholders, while being very

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Speaker 3: cognizant that dividends are really important to our investors and

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Speaker 3: that's why we have at least minimum fifty percent to

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Speaker 3: pay out ratio as a policy.

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Speaker 2: So does that mean that you see more of a

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Speaker 2: ray shifting of the business to assets like copper and

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Speaker 2: potentially away from iron or from Western Australia to places

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Speaker 2: like Chile.

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Speaker 3: So what I would say is that iron ore is

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Speaker 3: a fantastic business for BHP and continues to be and

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Speaker 3: will be. And in fact, we, as I mentioned, not

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Speaker 3: only are the lowest cost producer. Last financial year, we

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Speaker 3: generated eight dollars more in cash per ton of iron

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Speaker 3: ore compared to the nearest competitor in Pilbra. But equally

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Speaker 3: as per our strategy, we have the aspiration for more

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Speaker 3: and more future facing commodity exposure in our portfolio, and

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Speaker 3: copper is that commodity with multi users, with demand and

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Speaker 3: supply dynamics which are very positive, which has priced a

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Speaker 3: positive outlook. And we are the largest resource holder of

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Speaker 3: copper in the world, first or second producer of copper

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Speaker 3: in the world. And now by end of June we

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Speaker 3: would have delivered twenty four percent growth in last three

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Speaker 3: years just on copper astick place to be and some

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Speaker 3: more growth as I said, to come, and that is

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Speaker 3: an exposure we are looking to add. And I should

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Speaker 3: also mention we have potash business in Canada which again

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Speaker 3: is going to be producing its first terms by end

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Speaker 3: of next calendar year, will come in at the lowest

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Speaker 3: end of the cost curve and is a multi decade

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Speaker 3: effort which will be generating lots of cash and returns

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Speaker 3: for our shareholders. So very excited about our growth portfolio

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Speaker 3: and the portfolio shaping that is happening.

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Speaker 2: Mandata no major changes to guidance expectations over the full

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Speaker 2: year or the medium term. I just want to get

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Speaker 2: your thoughts low when we talk about iron or with

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Speaker 2: the weakness of the price and the expectations that the

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Speaker 2: commodity could fall under further pressure in twenty twenty twenty

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Speaker 2: twenty five, excuse me, especially as we look at the

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Speaker 2: concerns over a potential trade war between the US and

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Speaker 2: China and how that affect your business.

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Speaker 3: Yeah, so, I know, very important, and for that China

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Speaker 3: outlook is an important consideration. Last year, most of the

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Speaker 3: sectors in China did well had growth beta infrastructure, machinery, transportation,

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Speaker 3: or exports, but construction continued to be a drag and

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Speaker 3: a weakness. But China still produced one billion tons of steel.

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Speaker 3: Now where we are, we are seeing some early recovery

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Speaker 3: signs even on construction, which means it may be a

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Speaker 3: less of a drag this year. This includes for the

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Speaker 3: first time in last quarter, national housing sales turning into

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Speaker 3: growth for the first time since the end of twenty

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Speaker 3: twenty one. Equally, the government is taking a very pro

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Speaker 3: growth policy stance, both fiscally and on monetary policy to

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Speaker 3: stimulate the local economy, boosting local demand as well as

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Speaker 3: to rebalance the economy going forward. And I think that

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Speaker 3: would be specially true if there were headwinds on tariff.

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Speaker 3: So broadly speaking, we are again expecting another billion tons

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Speaker 3: of steel production out of China for the seventh year

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Speaker 3: in the row in twenty twenty five, and the growth

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Speaker 3: overall for China to be four and a half to

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Speaker 3: five percent this year and next year.

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Speaker 2: When we look at the share performance, and I know

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Speaker 2: you can't control the market van data, but it wasn't

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Speaker 2: the resources year in twenty twenty four. A lot of

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Speaker 2: analysts saying that there should be a switch in twenty

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Speaker 2: twenty five from the likes of the big banks into

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Speaker 2: the miners. Do you have anything to say about losing

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Speaker 2: your mantles as the biggest listed stock by market cap

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Speaker 2: to the likes of CBA.

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Speaker 3: So, as you said, not looking at the share price

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Speaker 3: on daily basis, But what I can say is that

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Speaker 3: I'm very ex cited about the financial, operational and execution

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Speaker 3: capability that we are showing in delivery of our projects.

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Speaker 3: From our perspective, the portfolio is doing very well, generating

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Speaker 3: industry leading margins, a rock solid return on capital of

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Speaker 3: twenty percent. We continue to be the lowest end of

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Speaker 3: the cost curve for most of our commodities, which is

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Speaker 3: important even if there were uncertainty in the external market,

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Speaker 3: which means with the strong balance sheet we're able to

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Speaker 3: balance not just shareholder return but also value adding growth

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Speaker 3: on behalf of our shareholders. So I think it's a

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Speaker 3: great place to be in.

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Speaker 2: And how much is union infiltration impacting some of your

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Speaker 2: growth plans? What do you say about productivity?

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Speaker 3: I would say that competition globally on resources mining investment

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Speaker 3: is heating up massively. Every country is attracting investment, talent

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Speaker 3: capability through fiscal incentives, through very simple permitting processes, but

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Speaker 3: also to high standards through enabling infrastructure, and all these

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Speaker 3: things matter, which means for Australia and for us in

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Speaker 3: long term, being competitive on every account is really critical.

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Speaker 3: The prosperity of the nation and the ability to take

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Speaker 3: advantage of the opportunities that we have in our resources

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Speaker 3: here is immense and something that we need to make

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Speaker 3: sure that we do not risk by having productivity becoming sluggish,

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Speaker 3: because if productivity becomes sluggish, the long term standard of

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Speaker 3: living and compety tenderness of Australia and Australians becomes actress.

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Speaker 1: That was Van Deja Pant, chief financial Officer at BHP,

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Speaker 1: talking to Juliet Sally on Osby's, Australia's leading provider of

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Speaker 1: live and on demand video of the latest news in

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Speaker 1: Australian business markets, economy and startups. Sign up at Osby's

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Speaker 1: dot com dot au. It's free. This is the Fear

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Speaker 1: and Greed Daily Interview. Join us every morning for the

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Speaker 1: full episode of Fear and Greed at Daily Business News.

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Speaker 1: For people who make their own decisions, I'm Jane Elma.

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Speaker 1: Enjoy your day.