BHP | Financial results for the half year ended 31 December 2024

Exchange rates

The following exchange rates relative to the US dollar have been applied in the financial information:

			As at	As at	As at
	Average	Average	31 December	31 December	30 June
	HY25	HY24	2024	2023	2024
Australian dollar1	0.66	0.65	0.62	0.68	0.67
Chilean peso	947	874	996	877	944

1       Displayed as US$ to A$1 based on common convention.

Capital and exploration expenditure

Historical capital and exploration expenditure and guidance are summarised below:

	FY25e	HY25	HY24	FY24
	US$M	US$M	US$M	US$M
Maintenance and decarbonisation1	3.0	1,357	1,350	2,956
Development - Minerals	6.5	3,649	3,195	5,860
Capital expenditure (purchases of property, plant and equipment)	9.5	5,006	4,545	8,816
Add: exploration expenditure	0.5	199	199	457
Capital and exploration expenditure	~10.0	5,205	4,744	9,273

1       Maintenance capital includes non-discretionary spend for the following purposes: deferred development and production stripping; risk reduction; compliance and asset integrity. Includes capitalised deferred stripping of US$517 m for HY25 (HY24: US$441 m) and US$1.1 bn estimated for FY25.

Major Projects

Commodity	Project and ownership	Project scope / capacity	Capital expenditure US$M	First production target date	Progress
Potash	Jansen Stage 1 (Canada) 100%	Design, engineering and construction of an underground potash mine and surface infrastructure, with capacity to produce 4.15 Mtpa.	5,723	End-CY26	Project is 63% complete
Potash	Jansen Stage 2 (Canada) 100%	Development of additional mining districts, completion of the second shaft hoist infrastructure, expansion of processing facilities and addition of rail cars to facilitate production of an incremental 4.36 Mtpa.	4,859	FY29	Project is 6% complete

Production and unit cost guidance

Historical production and production guidance are summarised below:

Production	Medium-term guidance	FY25 guidance		HY25	HY24	HY25 vs HY24
Copper (kt)		1,845 - 2,045		987.0	894.4	10%
Escondida (kt)	900 - 1,0001	1,180 - 1,300	Unchanged	644.0	527.9	22%
Pampa Norte (kt)2	~250	240 - 270	Unchanged	126.3	138.1	(9%)
Copper South Australia (kt)		300 - 325	Lowered	144.6	153.7	(6%)
Antamina (kt)		115 - 135	Unchanged	66.8	71.7	(7%)
Carajás (kt)		-	-	5.3	3.0	77%
Iron ore (Mt)		255 - 265.5		130.9	129.0	1%
WAIO (Mt)		250 - 260	Original3	128.1	126.5	1%
WAIO (100% basis) (Mt)	>305	282 - 294	Original3	144.7	142.1	2%
Samarco (Mt)		5 - 5.5	Upper half	2.8	2.5	9%
Steelmaking coal - BMA (Mt)	21.5 - 22.5	16.5 - 19		8.9	11.3	(21%)
BMA (100% basis) (Mt)	43 - 45	33 - 38	Upper half	17.9	22.6	(21%)
Energy coal - NSWEC (Mt)		13 - 15	Upper half	7.4	7.5	(1%)
Nickel - Western Australia Nickel (kt)		-	-	27.6	39.8	(31%)

1       Medium term refers to FY27 onwards. Production for FY25 and FY26 is expected to average between 1,200 and 1,300 ktpa.

2       HY24 includes 11 kt from Cerro Colorado which entered temporary care and maintenance in December 2023. Excluding these volumes, HY25 production decreased 1%. HY25 production and FY25 production guidance is for Spence only. Medium-term guidance refers to an average of 250 ktpa over five years on the basis that remediation of the previously identified TSF anomalies does not impact operations.

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BHP | Financial results for the half year ended 31 December 2024

 

3       In the Q2 FY25 Operational Review, WAIO production for FY25 was expected to be in the 'upper half' of the range. Following the impact of Tropical

          Cyclone Zelia in February 2025, production is now no longer expected to be in the upper half of the range.

 

Historical costs and cost guidance for our major assets are summarised below:

				HY25 at
				guidance	realised		HY25
	Medium-term		FY25	exchange	exchange		vs
Unit cost1		guidance2	guidance2	rates2	rates3	HY24	HY24
Escondida unit cost (US$/lb)4		1.50 - 1.80	1.30 - 1.60	1.43	1.33	1.51	-12%
Spence unit cost (US$/lb)		2.05 - 2.35	2.00 - 2.30	2.15	2.01	1.98	1%
Copper SA unit cost (US$/lb) 5			1.30 - 1.80	1.99	1.57	1.65	-5%
WAIO unit cost (US$/t)6		<17.50	18.00 - 19.50	18.92	18.19	18.46	-1%
BMA unit cost (US$/t)		<110	112 - 124	131.24	128.46	129.00	0%

1       Refer to Non-IFRS information for detailed unit cost reconciliations and definitions.

2       FY25 and medium-term unit cost guidance are based on exchange rates of AUD/USD 0.66 and USD/CLP 842.

3       Based on exchange rates of: HY25 AUD/USD 0.66 and USD/CLP 947 (realised); HY24 AUD/USD 0.65 and USD/CLP 874 (realised).

4       Escondida unit costs for FY24 onwards exclude revenue-based government royalties. Medium-term refers to FY27 onwards.

5       FY25 unit cost guidance is based on prices for by-products of gold US$2,000/oz and uranium US$80/lb.

6       The breakdown of C1 unit costs, excluding third party royalties, are detailed on page 12.

 

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BHP | Financial results for the half year ended 31 December 2024

Health, safety and social value^[1]

Key safety indicators

	Target/Goal	HY25	FY24	HY24
Fatalities	Zero work-related fatalities	0	1	0
High-potential injury (HPI) frequency[2]	Year-on-year improvement in HPI frequency	0.06	0.11	0.09
Total recordable injury frequency (TRIF)2	Year-on-year improvement in TRIF	4.3	4.8	4.6

Social value: key indicators scorecard

	Target/Goal	HY25	FY24	HY24
Operational GHG emissions  (MtCO2-e)[3]	Reduce operational GHG emissions by at least 30% from FY20 levels by FY30	4.5	9.2	4.7
Value chain GHG emissions (Scope 3): Committed funding in steelmaking partnerships and ventures to date (US$m)	Steelmaking: 2030 goal to support industry to develop steel production technology capable of 30% lower GHG emissions intensity relative to conventional blast furnace steelmaking, with widespread adoption expected post-CY30.	✓	140	✓
Value chain GHG emissions: Reduction in GHG emissions intensity of BHP-chartered shipping of our products from CY08 (%)[4]	Maritime transportation: 2030 goal to support 40% GHG emissions intensity reduction of BHP-chartered shipping of BHP products	44	42	43
Social investment (US$m BHP equity share)	Voluntary investment focused on the six pillars of our social value framework	37.4	136.7	36.1
Indigenous procurement spend (US$m)[5]	Key metric for part of our 2030 Indigenous partnerships goal, to support the delivery of mutually beneficial outcomes	452	609	289
Female employee participation[6] (%)	Aspirational goal for gender balanced employee workforce[7] by the end of CY25	38.9	37.1	36.2[8]
Indigenous employee participation6,[9] (%)	Australia: aim to achieve 9.7% by the end of FY27	8.6	8.3	8.4[10]
	Chile: aim to achieve 10.0% by the end of FY25	10.0	10.1	10.2
	Canada: aim to achieve 20.0% by the end of FY26	10.4	11.2	9.4
Area under nature-positive management practices[11] (%)	2030 goal of having at least 30% of the land and water we steward[12] under conservation, restoration or regenerative practices	1.6	1.6	-

 

 

The Financial Report for the half year ended 31 December 2024 has been prepared on the basis of accounting policies and methods of computation consistent with those applied in the 30 June 2024 financial statements contained within the Annual Report of the Group. This news release including the Financial Report is unaudited. Variance analysis relates to the relative financial and/or production performance of BHP and/or its operations during the December 2024 half year compared with the December 2023 half year, unless otherwise noted. Medium term refers to a five-year horizon, unless otherwise noted. Numbers presented may not add up precisely to the totals provided due to rounding.

 

The following abbreviations may have been used throughout this release: silver (Ag); gold (Au); billion tonnes (Bt); cost and freight (CFR); cost, insurance and freight (CIF); carbon dioxide equivalent (CO2-e); copper (Cu); dry metric tonne unit (dmtu); free on board (FOB); giga litres (GL); greenhouse gas (GHG); grams per tonne (g/t); high-potential injury (HPI); kilograms per tonne (kg/t); kilometre (km); million ounces per annum (Mozpa); million pounds (Mlb); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); OZ Minerals Ltd (OZL); pounds (lb); thousand ounces (koz); thousand ounces per annum (kozpa); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); sulphur (S); tonnes (t); total recordable injury frequency (TRIF); uranium (U); uranium oxide (U₃O₈); and wet metric tonnes (wmt).

Forward-looking statements

This release contains forward-looking statements, which involve risks and uncertainties. Forward-looking statements include all statements, other than statements of historical or present facts, including: statements regarding trends in commodity prices and currency exchange rates; demand for commodities; global market conditions, reserves and resources estimates; development and production forecasts; guidance; expectations, plans, strategies and objectives of management; climate scenarios; approval of projects and consummation of transactions; closure, divestment, acquisition or integration of certain assets, operations or facilities (including associated costs or benefits); anticipated production or construction commencement dates; capital costs and scheduling; operating costs and availability of materials and skilled employees; anticipated productive lives of projects, mines and facilities; the availability, implementation and adoption of new technologies, including artificial intelligence; provisions and contingent liabilities; and tax, legal and other regulatory developments.

Forward-looking statements may be identified by the use of terminology, including, but not limited to, 'aim', 'ambition', 'anticipate', 'aspiration', 'believe', 'commit', 'continue', 'could', 'ensure', 'estimate', 'expect', 'forecast', 'goal', 'guidance', 'intend', 'likely', 'may', 'milestone', 'must', 'need', 'objective', 'outlook', 'pathways', 'plan', 'project', 'schedule', 'seek', 'should', 'strategy', 'target', 'trend', 'will', 'would', or similar words. These statements discuss future expectations or performance, or provide other forward-looking information.

Forward-looking statements are based on management's expectations and reflect judgements, assumptions, estimates and other information available, as at the date of this release. These statements do not represent guarantees or predictions of future financial or operational performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. BHP cautions against reliance on any forward-looking statements.

For example, our future revenues from our assets, projects or mines described in this release will be based, in part, on the market price of the commodities produced, which may vary significantly from current levels or those reflected in our reserves and resources estimates. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular project, the expansion of certain facilities or mines, or the continuation of existing assets.

Other factors that may affect our future operations and performance, including the actual construction or production commencement dates, revenues, costs or production output and anticipated lives of assets, mines or facilities include our ability to profitably produce and deliver the products extracted to applicable markets; the impact of economic and geopolitical factors, including foreign currency exchange rates on the market prices of the commodities we produce and competition in the markets in which we operate; activities of government authorities in the countries where we sell our products and in the countries where we are exploring or developing projects, facilities or mines, including increases in taxes and royalties or implementation of trade or export restrictions; changes in environmental and other regulations; political or geopolitical uncertainty; labour unrest; weather, climate variability or other manifestations of climate change; and other factors identified in the risk factors discussed in OFR 8.1 in the Annual Report and BHP's filings with the U.S. Securities and Exchange Commission (the 'SEC') (including in Annual Reports on Form 20-F) which are available on the SEC's website at www.sec.gov.

Except as required by applicable regulations or by law, BHP does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events.

Past performance cannot be relied on as a guide to future performance.

Emissions data

Due to the inherent uncertainty and limitations in measuring greenhouse gas (GHG) emissions under the calculation methodologies used in the preparation of such data, all GHG emissions data or references to GHG emissions (including ratios or percentages) in this release are estimates. Emissions calculation and reporting methodologies may change or be progressively refined over time resulting in the need to restate previously reported data. There may also be differences in the manner that third parties calculate or report GHG emissions compared to BHP, which means that third-party data may not be comparable to our data. For information on how we calculate our GHG emissions, refer to the BHP GHG Emissions Calculation Methodology 2024, available at bhp.com.

No offer of securities

Nothing in this release should be construed as either an offer, or a solicitation of an offer, to buy or sell BHP securities in any jurisdiction, or be treated or relied upon as a recommendation or advice by BHP.

Reliance on third party information

The views expressed in this release contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This release should not be relied upon as a recommendation or forecast by BHP.

No financial or investment advice - South Africa

BHP does not provide any financial or investment 'advice' as that term is defined in the South African Financial Advisory and Intermediary Services Act, 37 of 2002, and we strongly recommend that you seek professional advice.

BHP and its subsidiaries

In this release, the terms 'BHP', the 'Company, the 'Group', 'BHP Group', 'our business', 'organisation', 'we', 'us', 'our' and ourselves' refer to BHP Group Limited and, except where the context otherwise requires, our subsidiaries. Refer to Note 30 - Subsidiaries of the Financial Statements in the Annual Report for a list of our significant subsidiaries. Those terms do not include non-operated assets. Our non-operated assets include Antamina, Samarco and Vicuña.

This release covers BHP's functions and assets (including those under exploration, projects in development or execution phases, sites and operations that are closed or in the closure phase) that have been wholly owned and operated by BHP or that have been owned as a BHP-operated joint venture¹ (referred to in this release as 'operated assets' or 'operations') during the period from 1 July 2024 to 31 December 2024 unless otherwise stated.

BHP also holds interests in assets that are owned as a joint venture but not operated by BHP (referred to in this release as 'non-operated joint ventures' or 'non-operated assets'). Notwithstanding that this release may include production, financial and other information from non-operated assets, non-operated assets are not included in the BHP Group and, as a result, statements regarding our operations, assets and values apply only to our operated assets unless stated otherwise.

 

1       References in this release to a 'joint venture' are used for convenience to collectively describe assets that are not wholly owned by BHP. Such references are not intended to characterise the legal relationship between the owners of the asset.

Certain sections of this release include data in relation to the Daunia and Blackwater mines, which were divested in FY24. Data in relation to the Daunia and Blackwater mines is shown for the period up to completion on 2 April 2024, unless stated otherwise.

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Authorised for lodgement by:

The Board of BHP Group Limited

 

Contacts

 

Media   media.relations@bhp.com		Investor Relations   investor.relations@bhp.com
Australia and Asia   Josie Brophy Mobile: +61 417 622 839   Europe, Middle East and Africa   Gabrielle Notley Mobile: +61 411 071 715   North America   Megan Hjulfors Mobile: +1 403 605 2314   Latin America   Renata Fernandez Mobile: +56 9 8229 5357		Australia and Asia   John-Paul Santamaria +61 499 006 018   Europe, Middle East and Africa   James Bell +44 7961 636 432   Americas   Monica Nettleton +1 416 518 6293
BHP Group Limited ABN 49 004 028 077 LEI WZE1WSENV6JSZFK0JC28 Registered in Australia Level 18, 171 Collins Street Melbourne Victoria 3000 Australia Tel +61 1300 55 4757 Fax +61 3 9609 3015 BHP Group is headquartered in Australia
bhp.com

 

 

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Financial Report

 

 

 

 

Financial Report

Half year ended
31 December 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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BHP | Financial results for the half year ended 31 December 2024

 

Contents

Half Year Financial Statements                                                                                                                                                                 Page

Consolidated Income Statement for the half year ended 31 December 2024                                                                                                 31

Consolidated Statement of Comprehensive Income for the half year ended 31 December 2024                                                                   31

Consolidated Balance Sheet as at 31 December 2024                                                                                                                                      32

Consolidated Cash Flow Statement for the half year ended 31 December 2024                                                                                             33

Consolidated Statement of Changes in Equity for the half year ended 31 December 2024                                                                            34

Notes to the Financial Statements                                                                                                                                                                    35

1.     Basis of preparation

2.     Exceptional items

3.     Interests in associates and joint venture entities

4.     Net finance costs

5.     Income tax expense

6.     Earnings per share

7.     Dividends

8.     Financial risk management - Fair values

9.     Significant events - Samarco dam failure

10.   Subsequent events

Directors' Report                                                                                                                                                                                                51

Directors' Declaration of Responsibility                                                                                                                                                            53

Auditor's Independence Declaration to the Directors of BHP Group Limited                                                                                                   54

Independent Review Report                                                                                                                                                                              55

 

  

 

30

 

 

BHP | Financial results for the half year ended 31 December 2024

Consolidated Income Statement for the half year ended 31 December 2024

	Notes	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Revenue		25,176	27,232	55,658
Other income		222	261	1,285
Expenses excluding net finance costs		(16,367)	(19,982)	(36,750)
Profit/(loss) from equity accounted investments, related impairments and expenses	3	95	(2,708)	(2,656)
Profit from operations		9,126	4,803	17,537
Financial expenses		(779)	(1,164)	(2,198)
Financial income		322	343	709
Net finance costs	4	(457)	(821)	(1,489)
Profit before taxation		8,669	3,982	16,048
Income tax expense		(2,904)	(2,215)	(6,015)
Royalty-related taxation (net of income tax benefit)		(480)	(61)	(432)
Total taxation expense	5	(3,384)	(2,276)	(6,447)
Profit after taxation		5,285	1,706	9,601
Attributable to non-controlling interests		869	779	1,704
Attributable to BHP shareholders		4,416	927	7,897
Basic earnings per ordinary share (cents)	6	87.1	18.3	155.8
Diluted earnings per ordinary share (cents)	6	86.9	18.3	155.5

The accompanying notes form part of this half year Financial Report.

Consolidated Statement of Comprehensive Income for the half year ended 31 December 2024

		Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Profit after taxation		5,285	1,706	9,601
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Hedges:
(Losses)/gains taken to equity		(88)	114	(33)
Losses/(gains) transferred to the income statement		33	(92)	49
Tax recognised within other comprehensive income		16	(7)	(5)
Total items that may be reclassified subsequently to the income statement		(39)	15	11
Items that will not be reclassified to the income statement:
Re-measurement (losses)/gains on pension and medical schemes		(6)	2	41
Equity investments held at fair value		17	(47)	(30)
Tax recognised within other comprehensive income		1	−	(13)
Total items that will not be reclassified to the income statement		12	(45)	(2)
Total other comprehensive (loss)/income		(27)	(30)	9
Total comprehensive income		5,258	1,676	9,610
Attributable to non-controlling interests		869	779	1,708
Attributable to BHP shareholders		4,389	897	7,902

The accompanying notes form part of this half year Financial Report.

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BHP | Financial results for the half year ended 31 December 2024

Consolidated Balance Sheet as at 31 December 2024

		31 Dec 2024 US$M	30 June 2024 US$M
ASSETS
Current assets
Cash and cash equivalents		9,560	12,501
Trade and other receivables		4,308	5,169
Other financial assets		533	381
Inventories		5,533	5,828
Current tax assets		728	314
Other		193	145
Total current assets		20,855	24,338
Non-current assets
Trade and other receivables		155	170
Other financial assets		1,230	1,229
Inventories		1,309	1,211
Property, plant and equipment		73,112	71,629
Intangible assets		1,761	1,718
Investments accounted for using the equity method		1,686	1,662
Deferred tax assets		61	67
Other		553	338
Total non-current assets		79,867	78,024
Total assets		100,722	102,362
LIABILITIES
Current liabilities
Trade and other payables		6,032	6,719
Interest bearing liabilities		491	2,084
Other financial liabilities		325	512
Current tax payable		1,048	884
Provisions		4,351	4,007
Deferred income		50	90
Total current liabilities		12,297	14,296
Non-current liabilities
Trade and other payables		33	45
Interest bearing liabilities		19,704	18,634
Other financial liabilities		1,971	1,759
Non-current tax payable		3	40
Deferred tax liabilities		3,537	3,332
Provisions		13,532	15,088
Deferred income		48	48
Total non-current liabilities		38,828	38,946
Total liabilities		51,125	53,242
Net assets		49,597	49,120
EQUITY
Share capital		4,964	4,899
Treasury shares		(25)	(36)
Reserves		(35)	(15)
Retained earnings		40,612	39,963
Total equity attributable to BHP shareholders		45,516	44,811
Non-controlling interests		4,081	4,309
Total equity		49,597	49,120

The accompanying notes form part of this half year Financial Report.

32

 

BHP | Financial results for the half year ended 31 December 2024

 

Consolidated Cash Flow Statement for the half year ended 31 December 2024

	Notes	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Operating activities
Profit before taxation		8,669	3,982	16,048
Adjustments for:
Depreciation and amortisation expense		2,648	2,629	5,295
Net (reversal of impairment)/impairment of property, plant and equipment, financial assets and intangibles		(56)	3,513	3,890
Net finance costs		457	821	1,489
(Profit)/loss from equity accounted investments, related impairments and expenses		(95)	2,708	2,656
Other		325	290	(243)
Changes in assets and liabilities:
Trade and other receivables		576	(763)	(290)
Inventories		197	(255)	(530)
Trade and other payables		(214)	(33)	(27)
Provisions and other assets and liabilities		(733)	(519)	(469)
Cash generated from operations		11,774	12,373	27,819
Dividends received		233	199	397
Interest received		265	352	724
Interest paid		(779)	(800)	(1,680)
Proceeds from cash management related instruments		261	311	361
Net income tax and royalty-related taxation refunded		95	175	547
Net income tax and royalty-related taxation paid		(3,532)	(3,726)	(7,503)
Net operating cash flows		8,317	8,884	20,665
Investing activities
Purchases of property, plant and equipment		(5,006)	(4,545)	(8,816)
Exploration and evaluation expenditure		(199)	(199)	(457)
Exploration and evaluation expenditure expensed and included in operating cash flows		174	170	399
Net investment and funding of equity accounted investments		(679)	(474)	(701)
Proceeds from sale of assets		55	59	149
Proceeds from sale of subsidiaries, operations and joint operations, net of their cash		285	55	1,072
Other investing		(299)	(145)	(408)
Net investing cash flows		(5,669)	(5,079)	(8,762)
Financing activities
Proceeds from interest bearing liabilities		1,150	4,991	5,091
Settlements of debt related instruments		(147)	−	(321)
Repayment of interest bearing liabilities		(1,311)	(6,315)	(7,327)
Distributions to non-controlling interests		−	−	(13)
Dividends paid		(3,865)	(4,045)	(7,675)
Dividends paid to non-controlling interests		(1,097)	(614)	(1,424)
Net financing cash flows		(5,270)	(5,983)	(11,669)
Net (decrease)/increase in cash and cash equivalents		(2,622)	(2,178)	234
Cash and cash equivalents, net of overdrafts, at the beginning of the period		12,498	12,423	12,423
Foreign currency exchange rate changes on cash and cash equivalents		(317)	74	(159)
Cash and cash equivalents, net of overdrafts, at the end of the period		9,559	10,319	12,498

The accompanying notes form part of this half year Financial Report.

 

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BHP | Financial results for the half year ended 31 December 2024

Consolidated Statement of Changes in Equity for the half year ended 31 December 2024

	Attributable to BHP shareholders
US$M	Share capital	Treasury shares	Reserves	Retained earnings	Total equity attributable to BHP shareholders	Non- controlling interests	Total equity
Balance as at 1 July 2024	4,899	(36)	(15)	39,963	44,811	4,309	49,120
Total comprehensive income	−	−	(22)	4,411	4,389	869	5,258
Transactions with owners:
Shares issued1	65	(65)	−	−	−	−	−
Employee share awards exercised net of employee contributions net of tax	−	76	(63)	(13)	−	−	−
Accrued employee entitlement for unexercised awards net of tax	−	−	65	−	65	−	65
Dividends	−	−	−	(3,749)	(3,749)	(1,097)	(4,846)
Balance as at 31 December 2024	4,964	(25)	(35)	40,612	45,516	4,081	49,597
Balance as at 1 July 2023	4,737	(41)	13	39,787	44,496	4,034	48,530
Total comprehensive income	−	−	(32)	929	897	779	1,676
Transactions with owners:
Shares issued1	82	(82)	−	−	−	−	−
Employee share awards exercised net of employee contributions net of tax	−	90	(71)	(19)	−	−	−
Accrued employee entitlement for unexercised awards net of tax	−	−	64	−	64	−	64
Dividends	−	−	−	(4,065)	(4,065)	(614)	(4,679)
Balance as at 31 December 2023	4,819	(33)	(26)	36,632	41,392	4,199	45,591

1       During the period, BHP Group Limited issued 2,370,371 fully paid ordinary shares to the BHP Group Limited Employee Equity Trust and to Solium Nominees (Australia) Pty Ltd at A$40.84 per share (31 December 2023: 2,919,231 fully paid ordinary shares at A$43.52 per share), to satisfy the vesting of employee share awards and related dividend equivalent entitlements under those employee share plans.

 

The accompanying notes form part of this half year Financial Report.

 

34

 

 

BHP | Financial results for the half year ended 31 December 2024

Notes to the Financial Statements

1.     Basis of preparation

This general purpose Financial Report for the half year ended 31 December 2024 is unaudited and has been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB) and AASB 134 'Interim Financial Reporting' as issued by the Australian Accounting Standards Board (AASB) and the Australian Corporations Act 2001 as applicable to interim financial reporting. The general purpose Financial Report for the half year ended 31 December 2024 does not include all of the notes of the type normally included in an annual report. Accordingly, this report should be read in conjunction with the annual consolidated Financial Statements for the year ended 30 June 2024 and any public announcements made by the Group in accordance with the continuous disclosure obligations of the ASX Listing Rules.

Segment Reporting disclosures from IAS 34/AASB 134 'Interim Financial Reporting' have been disclosed within the Financial performance summary on pages 20 and 21 outside of this Financial Report.

The half year Financial Statements have been prepared on a basis of accounting policies and methods of computation consistent with those applied in the 30 June 2024 annual consolidated Financial Statements contained within the Annual Report of the Group, with the exception of new accounting standards that became effective for the Group from 1 July 2024. The adoption of these new accounting standards has not had a significant impact on the Group. A number of accounting standards and interpretations have been issued and will be applicable in future periods. These standards have not been applied in the preparation of these half year Financial Statements.

All amounts are expressed in US dollars unless otherwise stated. The Group's presentation currency and the functional currency of the majority of its operations is US dollars as this is the principal currency of the economic environment in which it operates. Amounts in this Financial Report have, unless otherwise indicated, been rounded to the nearest million dollars.

The Directors have assessed the Group's ability to continue as a going concern for the 12 months from the date of this report and consider it appropriate to adopt the going concern basis of accounting in preparing the half year Financial Statements.

2.     Exceptional items

Exceptional items are those gains or losses where their nature, including the expected frequency of the events giving rise to them, and impact is considered material to the Financial Statements. Such items included within the Group's profit for the half year are detailed below.

Half year ended 31 December 2024	Gross US$M	Tax US$M	Net US$M
Exceptional items by category
Samarco dam failure	(442)	−	(442)
Western Australia Nickel (WAN) temporary suspension	(320)	96	(224)
Total	(762)	96	(666)
Attributable to non-controlling interests	−	−	−
Attributable to BHP shareholders	(762)	96	(666)

 

 

 

Samarco Mineração SA (Samarco) dam failure

The loss of US$442 million (after tax) relates to the Samarco dam failure, which occurred in November 2015, and comprises the following:

Half year ended 31 December 2024		US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure		(114)
Profit/(loss) from equity accounted investments, related impairments and expenses:
Samarco dam failure provision		194
Fair value change on forward exchange derivatives		(314)
Net finance costs		(208)
Income tax expense		−
Total1		(442)

1       Refer to note 9 'Significant events - Samarco dam failure' for further information.

 

35

 

BHP | Financial results for the half year ended 31 December 2024

Western Australia Nickel (WAN) temporary suspension

The Nickel West operations and the West Musgrave project at Western Australia Nickel were transitioned into temporary suspension during the period in line with the announcement on 11 July 2024.

The Group recognised costs of US$224 million (after tax) associated with the transition of operations to temporary suspension. Pre-tax costs of US$320 million included US$410 million related to employee redundancies, contract termination costs and inventory adjustments, offset by US$90 million impairment reversals of certain non-current assets from Nickel West operations to be redeployed to other operations within the Group.

The exceptional items relating to the half year ended 31 December 2023 and the year ended 30 June 2024 are detailed below.

Half year ended 31 December 2023	Gross US$M	Tax US$M	Net US$M
Exceptional items by category
Samarco dam failure	(3,120)	(53)	(3,173)
Impairment of Western Australia Nickel assets	(3,500)	1,031	(2,469)
Total	(6,620)	978	(5,642)
Attributable to non-controlling interests	−	−	−
Attributable to BHP shareholders	(6,620)	978	(5,642)

 

Year ended 30 June 2024	Gross US$M	Tax US$M	Net US$M
Exceptional items by category
Samarco dam failure	(3,677)	(85)	(3,762)
Impairment of Western Australia Nickel assets	(3,800)	1,125	(2,675)
Blackwater and Daunia gain on divestment	877	(203)	674
Total	(6,600)	837	(5,763)
Attributable to non-controlling interests	−	−	−
Attributable to BHP shareholders	(6,600)	837	(5,763)

 

36

 

BHP | Financial results for the half year ended 31 December 2024

 

3.     Interests in associates and joint venture entities

The Group's major shareholdings in associates and joint venture entities, including their profit/(loss), are listed below:

	Ownership interest at the Group's reporting date			Profit/(loss) from equity accounted investments, related impairments and expenses
	31 Dec 2024 %	31 Dec 2023 %	30 June 2024 %	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Share of profit/(loss) of equity accounted investments:
Compañia Minera Antamina SA	33.75	33.75	33.75	264	224	465
Samarco Mineração SA1	50.00	50.00	50.00	−	−	−
Other				(49)	(56)	(89)
Share of profit of equity accounted investments				215	168	376
Samarco dam failure provision1				194	(2,982)	(2,833)
Fair value change on forward exchange derivatives1				(314)	106	(199)
Profit/(loss) from equity accounted investments, related impairments and expenses				95	(2,708)	(2,656)

1       Refer to note 9 'Significant events - Samarco dam failure' for further information.

 

4.     Net finance costs

	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Financial expenses
Interest expense using the effective interest rate method:
Interest on bank loans, overdrafts and all other borrowings	667	764	1,467
Interest capitalised at 6.31% (31 December 2023: 6.79%; 30 June 2024: 6.82%)1	(287)	(217)	(530)
Interest on lease liabilities	86	81	181
Discounting on provisions and other liabilities	457	479	1,064
Other gains and losses:
Fair value change on hedged loans	(90)	345	(214)
Fair value change on hedging derivatives	17	(323)	188
Exchange variations on net debt	(71)	35	27
Other	−	−	15
Total financial expenses	779	1,164	2,198
Financial income
Interest income	(322)	(343)	(709)
Net finance costs	457	821	1,489

1       Interest has been capitalised at the rate of interest applicable to the specific borrowings financing the assets under construction or, where financed through general borrowings, at a capitalisation rate representing the average interest rate on such borrowings.

 

37

BHP | Financial results for the half year ended 31 December 2024

5.     Income tax expense

	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Total taxation expense comprises:
Current tax expense	3,155	3,271	7,435
Deferred tax expense/(benefit)	229	(995)	(988)
Total taxation expense	3,384	2,276	6,447

 

	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Factors affecting income tax expense for the year
Income tax expense differs to the standard rate of corporation tax as follows:
Profit before taxation	8,669	3,982	16,048
Tax on profit at Australian prima facie tax rate of 30 per cent	2,601	1,195	4,814
Derecognition of deferred tax assets and current year tax losses	578	237	666
Tax on remitted and unremitted foreign earnings	154	96	224
Foreign exchange adjustments	48	(29)	(79)
Amounts under/(over) provided in prior years	45	(8)	(25)
Recognition of previously unrecognised tax assets	(96)	(73)	(110)
Tax effect of profit/(loss) from equity accounted investments, related impairments and expenses1	(123)	844	737
Impact of tax rates applicable outside of Australia	(505)	(244)	(556)
Other	202	197	344
Income tax expense	2,904	2,215	6,015
Royalty-related taxation (net of income tax benefit)	480	61	432
Total taxation expense	3,384	2,276	6,447

1       This item removes the prima facie tax effect on profit/(loss) from equity accounted investments, related impairments and expenses that are net of tax, with the exception of the Samarco forward exchange derivatives described in note 9 'Significant events - Samarco dam failure', which are taxable.

 

International Tax Reform - Pillar Two Model Rules

The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting previously published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global economy, including the implementation of a global minimum tax. The Group has a presence in jurisdictions that have enacted or substantively enacted legislation in relation to the OECD/G20 BEPS Pillar Two model rules, including Australia, where its ultimate parent entity is tax resident. This effectively brings all jurisdictions in which the Group has a presence into the scope of the rules.

The Group's current tax expense related to Pillar Two income taxes is US$1 million for the period ended 31 December 2024. The temporary exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes has been applied at 31 December 2024.

The Group continues to monitor and evaluate the domestic implementation of the Pillar Two rules in the jurisdictions in which it operates. The implementation of legislation that is enacted or substantively enacted but not yet in effect is not expected to have a material impact on the Group's global effective tax rate.

38

 

BHP | Financial results for the half year ended 31 December 2024

6.     Earnings per share

	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Earnings attributable to BHP shareholders (US$M)1	4,416	927	7,897
Weighted average number of shares (Million)
-       Basic2	5,072	5,067	5,068
-       Diluted3	5,083	5,078	5,077
Earnings per ordinary share (US cents)4
-       Basic	87.1	18.3	155.8
-       Diluted	86.9	18.3	155.5
Headline earnings per ordinary share (US cents)5
-      Basic	86.3	67.0	195.9
-      Diluted	86.1	66.9	195.6

1       Diluted earnings attributable to BHP shareholders are equal to earnings attributable to BHP shareholders.

2       The calculation of the number of ordinary shares used in the computation of basic earnings per share is the weighted average number of ordinary shares of BHP Group Limited outstanding during the period after deduction of the number of shares held by the BHP Group Limited Employee Equity Trust.

3       For the purposes of calculating diluted earnings per share, the effect of 11 million dilutive shares has been taken into account for the half year ended 31 December 2024 (31 December 2023: 11 million shares; 30 June 2024: 9 million shares). The Group's only potential dilutive ordinary shares are share awards granted under employee share ownership plans. Diluted earnings per share calculation excludes instruments which are considered antidilutive.

          At 31 December 2024, there are no instruments which are considered antidilutive (31 December 2023: nil; 30 June 2024: nil).

4       Each American Depositary Share (ADS) represents twice the earnings for BHP Group Limited ordinary share.

5       Headline earnings is a Johannesburg Stock Exchange defined performance measure and is reconciled from earnings attributable to ordinary shareholders as follows:

	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Earnings attributable to BHP shareholders	4,416	927	7,897
Adjusted for:
(Gain)/loss on sales of property, plant and equipment, intangibles and investmentsi	(5)	(37)	(29)
Net (reversal of impairment)/impairment of property, plant and equipment and intangibles	(56)	3,530	3,905
Loss/(gain) on disposal of subsidiaries and operations	2	−	(915)
Tax effect of above adjustments	18	(1,023)	(928)
Subtotal of adjustments	(41)	2,470	2,033
Headline earnings	4,375	3,397	9,930
Diluted headline earnings	4,375	3,397	9,930

i         Included in other income.

 

39

 

BHP | Financial results for the half year ended 31 December 2024

 

7.     Dividends

		Half year ended 31 Dec 2024		Half year ended 31 Dec 2023		Year ended 30 June 2024
		Per share US cents	Total US$M	Per share US cents	Total US$M	Per share US cents	Total US$M
Dividends paid during the period
Prior year final dividend		74.0	3,749	80.0	4,065	80.0	4,065
Interim dividend		N/A	−	N/A	−	72.0	3,647
		74.0	3,749	80.0	4,065	152.0	7,712

Dividends paid during the period differs from the amount of dividends paid in the Consolidated Cash Flow Statement as a result of foreign exchange gains and losses relating to the timing of equity distributions between the record date and the payment date. Proceeds of US$107 million were received on derivative instruments as part of the funding of the final dividend paid during the period and disclosed in 'Proceeds from cash management related instruments' in the Consolidated Cash Flow Statement.

Each American Depositary Share (ADS) represents two ordinary shares of BHP Group Limited. Dividends determined on each ADS represent twice the dividend determined on each BHP Group Limited ordinary share.

Dividends are determined after period-end and announced with the results for the period. Interim dividends are determined in February and paid in March. Final dividends are determined in August and paid in September or October. Dividends determined are not recorded as a liability at the end of the period to which they relate. Subsequent to the half year, on 18 February 2025, BHP Group Limited determined an interim ordinary dividend of 50 US cents per share (US$2,537 million), with a payment date of 27 March 2025 (31 December 2023: interim dividend of 72 US cents per share - US$3,649 million; 30 June 2024: final dividend of 74 US cents per share - US$3,752 million).

BHP Group Limited dividends for all periods presented are, or will be, fully franked based on a tax rate of 30 per cent.

40

8.     Financial risk management - Fair values

Recognition and measurement

All financial assets and liabilities, other than derivatives and trade receivables, are initially recognised at the fair value of consideration paid or received, net of transaction costs as appropriate. Financial assets are initially recognised on their trade date.

Financial assets are subsequently carried at fair value or amortised cost based on:

·      the Group's purpose, or business model, for holding the financial asset;

·      whether the financial asset's contractual terms give rise to cash flows that are solely payments of principal and interest.

The resulting Financial Statements classifications of financial assets can be summarised as follows:

Contractual cash flows	Business model	Category
Solely principal and interest	Hold in order to collect contractual cash flows	Amortised cost
Solely principal and interest	Hold in order to collect contractual cash flows and sell	Fair value through other comprehensive income
Solely principal and interest	Hold in order to sell	Fair value through profit or loss
Other	Any of those mentioned above	Fair value through profit or loss

 

BHP | Financial results for the half year ended 31 December 2024

Solely principal and interest refers to the Group receiving returns only for the time value of money and the credit risk of the counterparty for financial assets held. The main exceptions for the Group are provisionally priced receivables and derivatives which are measured at fair value through profit or loss under IFRS 9/AASB 9 'Financial Instruments'.

The Group has the intention of collecting payment directly from its customers in most cases, however the Group also participates in receivables financing programs in respect of selected customers. Receivables in these portfolios which are classified as 'hold in order to sell', are provisionally priced receivables and are therefore held at fair value through profit or loss prior to sale to the financial institution.

With the exception of derivative contracts and provisionally priced trade payables which are carried at fair value through profit or loss, the Group's financial liabilities are classified as subsequently measured at amortised cost.

The Group may in addition elect to designate certain financial assets or liabilities at fair value through profit or loss or to apply hedge accounting where they are not mandatorily held at fair value through profit or loss.

Fair value measurement

The carrying amount of financial assets and liabilities measured at fair value is principally calculated based on inputs other than quoted prices that are observable for these financial assets or liabilities, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is estimated based on the Group's views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks implicit in such estimates.

The inputs used in fair value calculations are determined by the relevant segment or function. The functions support the assets and operate under a defined set of accountabilities authorised by the Executive Leadership Team. Movements in the fair value of financial assets and liabilities may be recognised through the income statement or in other comprehensive income according to the designation of the underlying instrument.

 

For financial assets and liabilities carried at fair value, the Group uses the following to categorise the inputs to the valuation method used based on the lowest level input that is significant to the fair value measurement as a whole:

IFRS 13 Fair value hierarchy	Level 1	Level 2	Level 3
Valuation inputs	Based on quoted prices (unadjusted) in active markets for identical financial assets and liabilities.	Based on inputs other than quoted prices included within Level 1 that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).	Based on inputs not observable in the market using appropriate valuation models, including discounted cash flow modelling.

41

 

BHP | Financial results for the half year ended 31 December 2024

Financial assets and liabilities

The financial assets and liabilities are presented by class in the table below at their carrying amounts.

	IFRS 13 Fair value hierarchy Level1	IFRS 9 Classification			31 Dec 2024 US$M	30 June 2024 US$M
Current cross currency and interest rate swaps2	2	Fair value through profit or loss			−	5
Current other derivative contracts3	2,3	Fair value through profit or loss			235	118
Current other financial assets4	3	Fair value through profit or loss			28	−
Current other financial assets5		Amortised cost			246	234
Current other investments6	1,2	Fair value through profit or loss			24	24
Non-current cross currency and interest rate swaps2	2	Fair value through profit or loss			122	113
Non-current other derivative contracts3	2,3	Fair value through profit or loss			65	103
Non-current other financial assets4	3	Fair value through profit or loss			168	195
Non-current other financial assets5,7		Amortised cost			416	398
Non-current investment in shares	1,3	Fair value through other comprehensive income			267	201
Non-current other investments6	1,2	Fair value through profit or loss			192	219
Total other financial assets					1,763	1,610
Cash and cash equivalents		Amortised cost			9,560	12,501
Trade and other receivables8		Amortised cost			1,194	1,597
Provisionally priced trade receivables	2	Fair value through profit or loss			2,748	3,250
Total financial assets					15,265	18,958
Non-financial assets					85,457	83,404
Total assets					100,722	102,362
Current cross currency and interest rate swaps2	2	Fair value through profit or loss			−	176
Current other derivative contracts	2	Fair value through profit or loss			249	241
Current other financial liabilities9		Amortised cost			76	95
Non-current cross currency and interest rate swaps2	2	Fair value through profit or loss			1,516	1,337
Non-current other derivative contracts	2,3	Fair value through profit or loss			144	54
Non-current other financial liabilities9		Amortised cost			311	368
Total other financial liabilities					2,296	2,271
Trade and other payables10		Amortised cost			5,284	6,049
Provisionally priced trade payables	2	Fair value through profit or loss			711	614
Bank overdrafts and short-term borrowings11		Amortised cost			1	3
Bank loans11		Amortised cost			3,737	2,610
Notes and debentures11		Amortised cost			13,918	14,932
Lease liabilities12					2,491	3,116
Other11		Amortised cost			48	57
Total financial liabilities					28,486	29,652
Non-financial liabilities					22,639	23,590
Total liabilities					51,125	53,242

1       All of the Group's financial assets and financial liabilities recognised at fair value were valued using market observable inputs categorised as Level 2 unless specified otherwise in the following footnotes.

2       Cross currency and interest rate swaps are valued using market data including interest rate curves and foreign exchange rates. A discounted cash flow approach is used to derive the fair value of cross currency and interest rate swaps at the reporting date.

3       Includes net other derivative assets of US$72 million related to power purchase contract agreements that are categorised as Level 3 (30 June 2024: US$92 million).

4       Includes receivables contingent on future realised coal price of US$196 million (30 June 2024: US$195 million).

5       Includes deferred consideration of US$520 million in relation to the divestment of the Blackwater and Daunia mines completed on 2 April 2024 (30 June 2024: US$495 million).

6       Includes investments held by BHP Foundation which are restricted and not available for general use by the Group of US$216 million (30 June 2024: US$243 million) of which other investments (mainly US Treasury Notes) of US$129 million is categorised as Level 1 (30 June 2024: US$134 million).

7       Includes Senior notes of US$142 million (30 June 2024: US$137 million) relating to Samarco with a maturity date of 30 June 2031. Refer to note 9 'Significant events - Samarco dam failure' for further information.

8       Excludes input taxes of US$521 million (30 June 2024: US$492 million) included in other receivables.

9       Includes the discounted settlement liability in relation to the cancellation of power contracts at the Group's Escondida operations. 

10     Excludes input taxes of US$70 million (30 June 2024: US$101 million) included in other payables.

11     All interest bearing liabilities, excluding lease liabilities, are unsecured.

12     Lease liabilities are measured in accordance with IFRS 16/AASB 16 'Leases'.

 

42

 

BHP | Financial results for the half year ended 31 December 2024

The carrying amounts in the table above generally approximate to fair value. In the case of US$525 million (30 June 2024: US$532 million) of fixed rate debt not swapped to floating rate, the fair value at 31 December 2024 was US$537 million (30 June 2024: US$538 million). The fair value is determined using a method that can be categorised as Level 2 and uses inputs based on benchmark interest rates, alternative market mechanisms or recent comparable transactions.

For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the fair value hierarchy by reassessing categorisation at the end of each reporting period. There were no transfers between categories during the period.

9.     Significant events - Samarco dam failure

As a result of the Samarco dam failure on 5 November 2015, BHP Billiton Brasil Ltda (BHP Brasil) and other Group entities continue to incur costs and maintain liabilities for future costs. The information presented in this note should be read in conjunction with section 7 'Samarco', Financial Statements note 4 'Significant events - Samarco dam failure' and Additional Information section 8 'Legal proceedings' in the 30 June 2024 Annual Report.

The financial impacts of the Samarco dam failure on the Group's income statement, balance sheet and cash flow statement for the half year ended 31 December 2024 are shown below and have been treated as an exceptional item.

Financial impacts of Samarco dam failure	Half year ended 31 Dec 2024 US$M	Half year ended 31 Dec 2023 US$M	Year ended 30 June 2024 US$M
Income statement
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure1	(114)	(54)	(139)
Profit/(loss) from equity accounted investments, related impairments and expenses:
Samarco dam failure provision2	194	(2,982)	(2,833)
Fair value change on forward exchange derivatives3	(314)	106	(199)
Loss from operations	(234)	(2,930)	(3,171)
Net finance costs4	(208)	(190)	(506)
Loss before taxation	(442)	(3,120)	(3,677)
Income tax expense5	−	(53)	(85)
Loss after taxation	(442)	(3,173)	(3,762)
Balance sheet movement
Other financial (liabilities)/assets6	(272)	94	(280)
Trade and other payables	(1)	(12)	(4)
Tax liabilities	−	(53)	(85)
Provisions	623	(2,851)	(2,824)
Net decrease/(increase) in liabilities	350	(2,822)	(3,193)

 

43

 

BHP | Financial results for the half year ended 31 December 2024

 

		Half year ended 31 Dec 2024 US$M		Half year ended 31 Dec 2023 US$M		Year ended 30 June 2024 US$M
Cash flow statement
Loss before taxation			(442)		(3,120)		(3,677)
Adjustments for:
Samarco dam failure provision2		(194)		2,982		2,833
Fair value change on forward exchange derivatives3		314		(106)		199
(Settlement of)/proceeds from cash management related instruments		(37)		142		218
Net finance costs4		208		190		506
Changes in assets and liabilities:
Trade and other payables		1		12		4
Net operating cash flows			(150)		100		83
Net investment and funding of equity accounted investments7			(637)		(446)		(640)
Net investing cash flows			(637)		(446)		(640)
Net decrease in cash and cash equivalents			(787)		(346)		(557)

1       Includes legal and advisor costs incurred.

2       US$440 million (31 December 2023: US$3,000 million; 30 June 2024: US$3,700 million) change in estimate and US$(634) million (31 December 2023: US$(18) million; 30 June 2024: US$(867) million) exchange translation.

3       The Group enters into forward exchange contracts to limit the Brazilian reais exposure on the dam failure provision. While not applying hedge accounting, the fair value changes in the forward exchange instruments are recorded within Profit/(loss) from equity accounted investments, related impairments and expenses in the Income Statement.

4       Amortisation of discounting of provision.

5       Includes tax on forward exchange derivatives and other taxes incurred during the period.

6       Includes forward exchange contracts described in 3 above, and Senior notes issued by Samarco as part of its Judicial Reorganisation in September 2023.

7       Current period reflects US$(637) million utilisation of the Samarco dam failure provision including the first settlement payment under the Settlement Agreement ratified on 6 November 2024. Comparative periods comprise utilisation of the Samarco dam failure provision (31 December 2023: US$(321) million; 30 June 2024: US$(515) million) and US$(125) million provided to Samarco following approval of the Judicial Reorganisation.

Equity accounted investment in Samarco

BHP Brasil's investment in Samarco remains at US$ nil. No dividends have been received by BHP Brasil from Samarco during the period and Samarco currently does not have profits available for distribution.

Provision related to the Samarco dam failure

					31 Dec 2024 US$M		30 June 2024 US$M
At the beginning of the reporting period					6,505		3,681
Movement in provision					(623)		2,824
Comprising:
Utilised				(637)		(515)
Adjustments charged to the income statement:
Change in cost estimate				440		3,700
Amortisation of discounting impacting net finance costs				208		506
Exchange translation				(634)		(867)
At the end of the reporting period					5,882		6,505
Comprising:
Current					2,013		1,500
Non-current					3,869		5,005
At the end of the reporting period					5,882		6,505

Samarco dam failure provision and contingencies

As at 31 December 2024, BHP Brasil has identified a provision and certain contingent liabilities arising as a consequence of the Samarco dam failure. The provision only reflects the future cost estimates associated with the obligations set out in the Settlement Agreement (see below).

Contingent liabilities will only be resolved when one or more uncertain future events occur or related impacts become capable of reliable measurement and, as such, determination of contingent liabilities disclosed in the financial statements requires significant judgement regarding the outcome of future events. A number of the claims below do not specify the amount of damages sought and, where this is specified, amounts could change as the matter progresses.

44

BHP | Financial results for the half year ended 31 December 2024

Ultimately, future changes in all those matters for which a provision has been recognised or contingent liability disclosed could have a material adverse impact on BHP's business, competitive position, cash flows, prospects, liquidity and shareholder returns.

The following table summarises the current status of significant ongoing matters relating to the Samarco dam failure, along with developments during the financial year, and the associated treatment in the Financial Statements:

Item	Provision	Contingent liability
Samarco dam failure - Settlement Agreement On 2 March 2016, BHP Brasil, Samarco and Vale S.A. (Vale) (the Companies) entered into a Framework Agreement with the Federal Government of Brazil, the states of Espirito Santo and Minas Gerais, and certain other public authorities to establish a foundation (Fundação Renova) to develop and execute environmental and socio-economic programs (Programs) to remediate and provide compensation for damage caused by the Samarco dam failure (the Framework Agreement). Key Programs included those for financial assistance and compensation of impacted persons and those for remediation of impacted areas and resettlement of impacted communities. On 3 May 2016, the Brazilian Federal Public Prosecution Office brought a civil claim against BHP Brasil and others seeking R$155 billion for reparation, compensation and moral damages in relation to the Samarco dam failure. Since the lodgement of the claim, the Federal Court had issued a number of interim decisions, certain of which were subject to ongoing appeal at 30 June 2024. On 25 October 2024, the Companies entered into an agreement with the Federal Government of Brazil, State of Minas Gerais, State of Espirito Santo, public prosecutors and public defenders (Public Authorities) that delivers full and final settlement of the Framework Agreement obligations, the Federal Public Prosecution Office civil claim and other claims by the Public Authorities relating to Samarco's Fundão dam failure (Settlement Agreement). On 6 November 2024 the Settlement Agreement was fully ratified by the Brazilian Supreme Court. A number of motions for clarification have been lodged with the Supreme Court and remain pending.	ü	û

 

 

 

Item	Provision	Contingent liability
The Settlement Agreement provides compensation and reparation for the impacts of the dam failure, and builds on the existing remediation and compensation work already performed by Fundação Renova. The Settlement Agreement was announced as having a financial value of R$170 billion (approximately US$31.7 billion[13]) on a 100% basis, including amounts already spent plus future payments and obligations as follows: ·      R$38 billion (approximately US$7.9 billion1) in amounts already spent to 30 September 2024 on remediation and compensation since 2016. ·      R$100 billion (approximately US$18.0 billion1) in instalments over 20 years to the Public Authorities, the relevant municipalities and Indigenous peoples and traditional communities (Obligation to Pay). ·      Additional performance obligations for an estimated financial value of approximately R$32 billion (approximately US$5.8 billion1) that will be carried out by Samarco in accordance with the terms of the Agreement (Obligations to Perform). These obligations include remediation and compensation programs that are expected to be largely completed over the next 15 years. 45   Under the Settlement Agreement, Samarco is the primary obligor for the settlement obligations and BHP Brasil and Vale are each secondary obligors of any obligation that Samarco cannot fund or perform in proportion to their shareholding at the time of the dam failure, which is 50% each. While Samarco has recommenced operations, Samarco's long-term cash flow generation remains highly sensitive to factors including returning to full production capacity, commodity prices and foreign exchange rates. Further, under the Samarco Judicial Reorganisation Plan (JR Plan), ratified by the JR Court on 1 September 2023, Samarco's funding of obligations to remediate and compensate the damages resulting from the dam failure is capped at US$1 billion for the period CY2024 to CY2030. Notwithstanding this cap, and subject to certain conditions, to the extent that Samarco each year has a positive cash balance after meeting its various obligations, during this period Samarco's shareholders are able to direct 50 per cent of Samarco's year end excess cash balance to fund remediation obligations, including those arising from the Settlement Agreement. The Group has considered the outcomes of the Settlement Agreement, including the estimated costs of executing the Obligations to Perform, and the extent to which Samarco may be in a position to fund any future outflows to measure the provision related to the Samarco dam failure at US$5,882 million at 31 December 2024. The provision reflects the Group's best estimate of outflows required to settle all obligations arising from the Settlement Agreement. Uncertainty remains around the Obligations to Perform, and there is a risk that outcomes may be materially higher or lower than amounts reflected in BHP Brasil's provision for the Samarco dam failure. Key areas of uncertainty include the future costs relating to the Obligation to Perform programs and the extent to which Samarco is able to directly fund the settlement obligations. Further information on the key areas of estimation uncertainty is provided in the 'Key judgements and estimates' section below. BHP Brasil, Samarco and Vale continue to maintain security, as required by a Governance Agreement, ratified on 8 August 2018, with the security currently comprising insurance bonds and a charge over certain Samarco assets. The security is expected to be released during CY2025 considering that there is no requirement under the Settlement Agreement to maintain the existing security.
Item	Provision	Contingent liability
Australian class action claim BHP Group Limited is named as a defendant in a shareholder class action filed in the Federal Court of Australia on behalf of persons who acquired shares in BHP Group Limited or BHP Group Plc (now BHP Group (UK) Ltd) in periods prior to the Samarco dam failure. The amount of damages sought is unspecified. A trial is scheduled to commence in September 2025.	û	ü
United Kingdom group action claim and Vale and Samarco's Netherlands collective action claim BHP Group (UK) Ltd (formerly BHP Group Plc) and BHP Group Limited (BHP Defendants) are named as defendants in group action claims for damages filed in the courts of England. These claims were filed on behalf of certain individuals, municipalities, businesses, faith-based institutions and communities in Brazil allegedly impacted by the Samarco dam failure. 46 The amount of damages sought in these claims is unspecified. A trial in relation to BHP's liability for the Samarco dam failure commenced in October 2024 and is expected to conclude in March 2025 and therefore a present obligation in relation to this matter is yet to be determined. In December 2022, the BHP Defendants filed their defence and a contribution claim against Vale. The contribution claim contended that if the BHP Defendants' defence is not successful and the BHP Defendants are ordered to pay damages to the claimants, Vale should contribute to any amount payable. Vale contested the jurisdiction of the English courts to determine the contribution claim, with those challenges ultimately dismissed in December 2023. In January 2024, the BHP Defendants were served with a new group action filed in the courts of England on behalf of additional individuals and businesses in Brazil allegedly impacted by the Samarco dam failure. The new action makes broadly the same claims as the original action and the amount of damages sought in these claims is unspecified. In March 2024, a collective action complaint was filed in the Netherlands against Vale and a Dutch subsidiary of Samarco for compensation relating to the Fundão Dam failure. The claim filed in the Netherlands indicates that these claims were filed on behalf of certain individuals, municipalities, businesses, associations and faith-based institutions allegedly impacted by the Samarco dam failure who are not also claimants in the UK group action claims referred to above. BHP is not a defendant in the Netherlands proceedings. In July 2024, the BHP Defendants, BHP Brasil and Vale entered into an agreement - without any admission of liability in any proceedings - whereby: (i) Vale will pay 50% of any amounts that may be payable by the BHP Defendants to the claimants in the UK group action claims (or by the BHP Defendants, BHP Brasil or their related parties to claimants in any other proceedings in Brazil, England or the Netherlands covered by the agreement); and (ii) BHP Brasil will pay 50% of any amounts that may be payable by Vale to the claimants in the Netherlands proceedings (or by Vale or its related parties to claimants in any other proceedings in Brazil, England or the Netherlands covered by the agreement). The agreement reinforced the terms of the Framework Agreement entered into in 2016 and is consistent with the aforementioned Settlement Agreement entered into in October 2024, which requires BHP Brasil and Vale to each contribute 50% to the funding of the settlement obligations where Samarco is unable to contribute that funding. The BHP Defendants withdrew the contribution claim against Vale in England as it is no longer necessary given this agreement.	û	ü

 

Item	Provision	Contingent liability
Criminal charges The Federal Prosecutors' Office filed criminal charges against BHP Brasil, Samarco and Vale and certain employees and former employees of BHP Brasil (Affected Individuals) in the Federal Court of Ponte Nova, Minas Gerais (Federal Court). On 14 November 2024, the Federal Court ruled that BHP Brasil, Samarco and Vale and certain Affected Individuals (non-affiliated with BHP) who still had their cases open, are not liable for criminal offences relating to the failure of Samarco's Fundão tailings dam. In December 2024 the Federal Prosecutors' Office filed an appeal, and a ruling is pending. As to the Affected Individuals affiliated to BHP, four had their cases closed, while the remaining four had favourable decisions dismissing the charges against them. A ruling on Federal Prosecutors' Office appeal is pending. 47	û	ü
Civil public action commenced by Associations concerning the use of TANFLOC for water treatment Following the dismissal, on 17 November 2023, of an initial lawsuit filed by four associations due to procedural reasons (an appeal is pending), in July 2024 two further associations filed another lawsuit against Samarco, BHP Brasil and Vale and others, including the States of Minas Gerais and Espirito Santo; the Federal Government and the Water Treatment Companies, who were all also defendants in the first lawsuit. The second lawsuit was also dismissed due to procedural reasons on 12 November 2024 and the associations have appealed against this judgement with BHP Brasil having until 28 February 2025 to respond to the appeal. In the lawsuits the plaintiffs alleged that the defendants carried out a clandestine study on the citizens of the locations affected by the Fundão Dam Failure where Tanfloc - a tannin-based flocculant/coagulant - was used in the water treatment process. The plaintiffs claim that this product allegedly put the population at risk due to its alleged experimental qualities and dosage applied. The plaintiffs presented largely similar pleas - e.g. material damages, moral damages - with the first lawsuit including a request for loss of profits and that the defendants should pay for water supply in all locations where there is no water source other than the Doce River.	û	ü

 

Item	Provision	Contingent liability
Other claims BHP Brasil is among the companies named as defendants in a number of legal proceedings initiated by individuals, non-governmental organisations, corporations and governmental entities in Brazilian Federal and State courts following the Samarco dam failure. The other defendants include Vale, Samarco and Fundação Renova. The lawsuits include claims for compensation, environmental reparation and violations of Brazilian environmental and other laws, among other matters. The lawsuits seek various remedies including reparation costs, compensation to injured individuals and families of the deceased, recovery of personal and property losses, moral damages and injunctive relief. Certain of these legal proceedings are outside the scope of the Settlement Agreement. In addition, government inquiries, studies and investigations relating to the Samarco dam failure have been commenced by numerous agencies and individuals of the Brazilian government and may still be ongoing. Additional lawsuits and government investigations relating to the Samarco dam failure could be brought against BHP Brasil and other Group entities in Brazil or other jurisdictions. The outcomes of these claims, investigations and proceedings remain uncertain and continue to be disclosed as contingent liabilities.	û	ü

 

48

BHP | Financial results for the half year ended 31 December 2024

Commitments

Under the terms of the Samarco joint venture agreement, BHP Brasil does not have an existing obligation to fund Samarco.

However, under the Settlement Agreement, while Samarco is the primary obligor for the Settlement Agreement obligations, BHP Brasil and Vale are each secondary obligors of any obligation that Samarco cannot fund (including as restricted by the terms of the Judicial Reorganisation) or perform in proportion to their shareholding at the time of the dam failure, which is 50% each.

BHP Brasil has approved preliminary funding of up to US$1 billion to Samarco for the Settlement Agreement obligations during calendar year 2025.

Key judgements and estimates Judgements The outcomes of litigation are inherently difficult to predict and significant judgement has been applied in assessing the likely outcome of legal claims and determining which legal claims require recognition of a provision or disclosure of a contingent liability. The facts and circumstances relating to these cases are regularly evaluated in determining whether a provision for any specific claim is required. Management has determined that a provision can be recognised at 31 December 2024 to reflect the estimated costs associated with obligations under the Settlement Agreement. It is not yet possible to provide a range of possible outcomes or a reliable estimate of potential future exposures to BHP in connection to the contingent liabilities noted above, given their status. Estimates The provision for the Samarco dam failure reflects the Group's estimate of the costs to meet the Group's obligations under the Settlement Agreement and requires the use of significant judgements, estimates and assumptions. While the provision has been measured based on the latest information available, changes in facts and circumstances are likely in future reporting periods and may lead to material revisions to these estimates and there is a risk that outcomes may be materially higher or lower than amounts currently reflected in the provision. However, it is currently not possible to determine what facts and circumstances may change, therefore revisions in future reporting periods due to the key estimates and factors outlined below cannot be reliably measured. The key estimates that may have a material impact upon the provision in the next and future reporting periods include: ·      the cost of executing the Obligations to Perform Programs under the Settlement Agreement, including as a result of the number of individuals, small businesses, Municipalities and Indigenous and Traditional communities who opt-in to the Settlement Agreement and the extent to which individuals opting-in are eligible for indemnification under the Settlement agreement; and ·      the extent to which Samarco is able to directly fund any future obligations relating to the Settlement Agreement. Samarco's long-term cash flow generation remains highly sensitive to factors including its ability to return to full production capacity, commodity prices and foreign exchange rates. The provision may also be affected by factors including but not limited to updates to discount and foreign exchange rates. To limit the Group's exposure to potential Brazilian reais foreign exchange volatility, the Group has entered into forward exchange contracts, predominantly covering the period up to FY2028. A 0.5% increase in the discount rate would, in isolation, reduce the provision by approximately US$100 million. In addition, the provision may be impacted by decisions in, or resolution of, existing and potential legal claims in Brazil and other jurisdictions, including the outcome of the United Kingdom group action claims, the Australian class action and the claim filed in the Netherlands against Vale and a Dutch subsidiary of Samarco. Given these factors, future actual cash outflows may differ from the amounts currently provided and changes to any of the key assumptions and estimates outlined above could result in a material impact to the provision in the next and future reporting periods.

49

 

BHP | Financial results for the half year ended 31 December 2024

 

10.   Subsequent events

On the 15 January 2025, the Group announced that BHP Investments Canada Inc. (BHP Canada) and Lundin Mining Corporation (Lundin Mining) had completed the acquisition of Filo Corp., a Toronto Stock Exchange listed company. Filo Corp. owns 100% of the Filo del Sol (FDS) copper project.

BHP Canada and Lundin Mining have also formed the Canadian-incorporated joint venture company, Vicuña Corp. (the Joint Venture) to hold the FDS copper project and the Josemaria copper project located in the Vicuña district of Argentina and Chile. BHP Canada and Lundin Mining each own 50% of the Joint Venture.

Prior to completion, Lundin Mining owned 100% of the Josemaria project. At completion, BHP Canada acquired a 50% interest in the Josemaria copper project from Lundin Mining. BHP Canada and Lundin Mining then contributed their respective 50% interests in Filo Corp. and the Josemaria project into the Joint Venture.

BHP's total cash payment for the Transaction was US$2.0 billion.

Other than the matters outlined elsewhere in this Financial Report, no matters or circumstances have arisen since the end of the half year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods.

50

BHP | Financial results for the half year ended 31 December 2024

Directors' Report

The Directors present their report together with the half year Financial Statements for the half year ended 31 December 2024 and the auditor's review report thereon.

Review of Operations

A detailed review of the Group's operated and non-operated assets, the results of those operations during the half year ended 31 December 2024 and likely future developments are given on pages 1 to 28. The Review of Operations has been incorporated into, and forms part of, this Directors' Report.

Principal Risks and Uncertainties

The principal risks affecting the Group are described on pages 73 to 82 of the Group's Annual Report for the year ended 30 June 2024 (a copy of which is available on the Group's website at www.bhp.com) and are grouped into the categories of risks listed below. Our principal risks may occur as a result of our activities globally, including in connection with our operated and non-operated assets, third parties engaged by BHP or through our value chain. Our principal risks, individually or collectively, could threaten our viability, strategy, business model, future performance, solvency or liquidity and reputation. They could also materially and adversely affect the health and safety of our people or members of the public, the environment, the communities where we or our third-party partners operate, or the interests of our stakeholders, which could in each case, lead to litigation, regulatory investigation or enforcement action (including class actions or actions arising from contractual, legacy or other liabilities associated with divested assets), or a loss of stakeholder and/or investor confidence. There are no material changes in those risk factors for the first six months of this financial year except to the extent described in the 'Outlook' section.

·      Operational events: Risks associated with operational events in connection with our activities globally, resulting in significant adverse impacts on our people, communities, the environment or our business.

·      Significant social or environmental impacts: Risks associated with significant impacts of our operations on and contributions to communities and environments throughout the life cycle of our assets and across our value chain.

·      Optimising growth and portfolio returns: Risks associated with our ability to position our asset portfolio to generate returns and value for shareholders, including through acquisitions, mergers and divestments.

·      Low-carbon transition: Risks associated with the transition to a low-carbon economy.

·      Accessing key markets: Risks associated with market concentration and our ability to sell and deliver products into existing and future key markets, impacting our economic efficiency.

·      Adopting technologies and maintaining digital security: Risks associated with adopting and implementing new technologies, and maintaining the effectiveness of our existing digital landscape (including cyber defences) across our value chain.

·      Ethical misconduct: Risks associated with actual or alleged deviation from societal or business expectations of ethical behaviour (including breaches of laws or regulations) and wider or cumulative organisational cultural failings, resulting in significant reputational impacts.

·      Inadequate business resilience: Risks associated with unanticipated or unforeseeable adverse events and a failure of planning and preparedness to respond to, manage and recover from adverse events (including potential physical climate-related impacts).

Dividend

Full details of dividends are given on page 4. 

51

 

BHP | Financial results for the half year ended 31 December 2024

 

Board of Directors

The Directors of BHP at any time during or since the end of the half year ended 31 December 2024 are:

Ken MacKenzie - Chairman since 1 September 2017 (a Director since 22 September 2016)

Mike Henry - an Executive Director since 1 January 2020

Xiaoqun Clever-Steg - a Director since 1 October 2020

Gary Goldberg - a Director since 1 February 2020

Michelle Hinchliffe - a Director since 1 March 2022

Don Lindsay - a Director since May 2024

Ross McEwan - a Director since April 2024

Christine O'Reilly - a Director since 12 October 2020

Catherine Tanna - a Director since 4 April 2022

Dion Weisler - a Director since 1 June 2020

 

Auditor's independence declaration

Ernst & Young in Australia are the auditors of BHP Group Limited. Their auditor's independence declaration under Section 307C of the Australian Corporations Act 2001 is set out on page 54 and forms part of this Directors' Report.

Rounding of amounts

BHP Group Limited is an entity to which Australian Securities and Investments Commission (ASIC) Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 applies. Amounts in the Directors' Report and half year Financial Statements have been rounded to the nearest million dollars in accordance with ASIC Instrument 2016/191. 

Signed in accordance with a resolution of the Board of Directors.

 

 

Ken MacKenzie - Chair 

 

 

Mike Henry - Chief Executive Officer 

 

 

Dated this 18th day of February 2025

 

52

 

 

BHP | Financial results for the half year ended 31 December 2024

Directors' Declaration of Responsibility

The half year Financial Report is the responsibility of, and has been approved by, the Directors. In accordance with a resolution of the Directors of BHP Group Limited, the Directors declare that:

(a)    in the Directors' opinion and to the best of their knowledge, the half year Financial Statements and notes, set out on pages 29 to 50, have been prepared in accordance with the Australian Corporations Act 2001, including:

(i)     complying with applicable accounting standards and the Australian Corporations Regulations 2001; and

(ii)    giving a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as at 31 December 2024 and of its performance for the half year ended on that date;

(b)   for the purposes of the Disclosure Guidance and Transparency Rules in the United Kingdom, to the best of the Directors' knowledge, the Directors' Report, which incorporates the Review of Operations on pages 1 to 28, includes: a fair review of (i) the important events during the first six months of the current financial year and their impact on the half year Financial Statements; (ii) a description of the principal risks and uncertainties for the remaining six months of the year; and (iii) related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period, and changes in the related party transactions described in the last annual report that could have such a material effect; and 

(c)    in the Directors' opinion, there are reasonable grounds to believe that BHP Group Limited will be able to pay its debts as and when they become due and payable.

 

Signed on behalf of the Directors in accordance with a resolution of the Board of Directors.

 

 

 

 

Ken MacKenzie - Chair

 

 

 

 

Mike Henry - Chief Executive Officer

Dated this 18th day of February 2025

53

 

BHP | Financial results for the half year ended 31 December 2024

Auditor's Independence Declaration to the Directors of BHP Group Limited

 

As lead auditor for the review of the financial report of BHP Group Limited for the half year ended 31 December 2024, I declare to the best of my knowledge and belief, there have been:

a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review;

b. No contraventions of any applicable code of professional conduct in relation to the review; and

c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the review.

This declaration is in respect of BHP Group Limited and the entities it controlled during the financial period.

 

Ernst & Young

 

Rodney Piltz

Partner

Melbourne

18 February 2025

 

54

BHP | Financial results for the half year ended 31 December 2024

Independent Review Report

Independent auditor's review report to the members of BHP Group Limited

 

Conclusion

We have reviewed the accompanying half year financial report of BHP Group Limited and its subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 31 December 2024, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the half year ended on that date, notes comprising material accounting policy information and other explanatory information, and the directors' declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half year financial report of the Group does not comply with the Corporations Act 2001, including:

a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December 2024 and of its consolidated financial performance for the half year ended on that date; and

b. Complying with International Accounting Standard IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB), Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

 

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (ASRE 2410) and ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity (ISRE 2410). Our responsibilities are further described in the Auditor's responsibilities for the review of the half-year financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

 

Directors' responsibilities for the half year financial report

The directors of the Company are responsible for the preparation of the half year financial report that gives a true and fair view in accordance with International Accounting Standards as issued by the IASB, Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

 

 

 

55

 

BHP | Financial results for the half year ended 31 December 2024

 

Auditor's responsibilities for the review of the half year financial report

 

Our responsibility is to express a conclusion on the half year financial report based on our review.

ASRE 2410 and ISRE 2410 require us to conclude whether we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group's financial position as at 31 December 2024 and its performance for the half year ended on that date, and complying with International Accounting Standard IAS 34 Interim Financial Reporting as issued by the IASB, Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

 

A review of a half year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards or International Standards on Auditing issued by the International Auditing and Assurance Standards Board and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

 

Ernst & Young

 

 

 

Rodney Piltz 

Partner

Melbourne

18 February 2025

56 

 

Non-IFRS Financial Information Half year ended 31 December 2024

Non-IFRS Financial Information

 

 

BHP | Financial results for the half year ended 31 December 2024

Non-IFRS financial information

We use various non-IFRS financial information to reflect our underlying financial performance.

Non-IFRS financial information is not defined or specified under the requirements of IFRS, but is derived from the Group's Consolidated Financial Statements prepared in accordance with IFRS. The non-IFRS financial information and the below reconciliations included in this document are unaudited. The non-IFRS financial information presented is consistent with how management review financial performance of the Group with the Board and the investment community.

The "Definition and calculation of non-IFRS financial information" section outlines why we believe non-IFRS financial information is useful and the calculation methodology. We believe non-IFRS financial information provides useful information, however should not be considered as an indication of, or as a substitute for, statutory measures as an indicator of actual operating performance (such as profit or net operating cash flow) or any other measure of financial performance or position presented in accordance with IFRS, or as a measure of a company's profitability, liquidity or financial position.

The following tables provide reconciliations between non-IFRS financial information and their nearest respective IFRS measure.

Exceptional items

To improve the comparability of underlying financial performance between reporting periods, some of our non-IFRS financial information adjusts the relevant IFRS measures for exceptional items. Refer to the Group's Financial Report for further information on exceptional items.

Exceptional items are those gains or losses where their nature, including the expected frequency of the events giving rise to them, and impact is considered material to the Group's Consolidated Financial Statements. The exceptional items included within the Group's profit for the financial periods are detailed below.

 

Half year ended 31 December	2024 US$M	2023 US$M
Revenue	−	−
Other income	−	−
Expenses excluding net finance costs, depreciation, amortisation and impairments	(524)	(54)
Depreciation and amortisation	−	−
Net reversal of impairment/(impairment) of property, plant and equipment and intangibles	90	(3,500)
Profit/(loss) from equity accounted investments, related impairments and expenses	(120)	(2,876)
Profit/(loss) from operations	(554)	(6,430)
Financial expenses	(208)	(190)
Financial income	−	−
Net finance costs	(208)	(190)
Profit/(loss) before taxation	(762)	(6,620)
Income tax (expense)/benefit	96	978
Royalty-related taxation (net of income tax benefit)	−	−
Total taxation (expense)/benefit	96	978
Profit/(loss) after taxation	(666)	(5,642)
Total exceptional items attributable to non-controlling interests	−	−
Total exceptional items attributable to BHP shareholders	(666)	(5,642)
Exceptional items attributable to BHP shareholders per share (US cents)	(13.1)	(111.3)
Weighted basic average number of shares (Million)	5,072	5,067

 

 

58

BHP | Financial results for the half year ended 31 December 2024

Non-IFRS financial information derived from Consolidated Income Statement

Underlying attributable profit

Half year ended 31 December	2024 US$M	2023 US$M
Profit after taxation attributable to BHP shareholders	4,416	927
Total exceptional items attributable to BHP shareholders1	666	5,642
Underlying attributable profit	5,082	6,569

1       Refer to Exceptional items for further information.

 

Underlying basic earnings per share

Half year ended 31 December	2024 US cents	2023 US cents
Basic earnings per ordinary share	87.1	18.3
Exceptional items attributable to BHP shareholders per share1	13.1	111.3
Underlying basic earnings per ordinary share	100.2	129.6

1       Refer to Exceptional items for further information.

 

Underlying EBITDA

Half year ended 31 December	2024 US$M	2023 US$M
Profit from operations	9,126	4,803
Exceptional items included in profit from operations1	554	6,430
Underlying EBIT	9,680	11,233
Depreciation and amortisation expense	2,648	2,629
Net (reversal of impairment)/impairment of property, plant and equipment and intangibles	(56)	3,513
Exceptional items included in Depreciation, amortisation and impairments1	90	(3,500)
Underlying EBITDA	12,362	13,875

1       Refer to Exceptional items for further information.

 

59

 

BHP | Financial results for the half year ended 31 December 2024

 

Underlying EBITDA - Segment

Half year ended 31 December 2024 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations2	Total Group
Profit from operations	3,883	6,034	289	(1,080)	9,126
Exceptional items included in profit from operations1	−	162	−	392	554
Depreciation and amortisation expense	1,121	988	277	262	2,648
Net (reversal of impairment)/impairment of property, plant and equipment and intangibles	7	3	1	(67)	(56)
Exceptional items included in Depreciation, amortisation and impairments1	−	−	−	90	90
Underlying EBITDA	5,011	7,187	567	(403)	12,362
Half year ended 31 December 2023 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations2	Total Group
Profit from operations	2,438	5,788	652	(4,075)	4,803
Exceptional items included in profit from operations1	−	2,899	−	3,531	6,430
Depreciation and amortisation expense	1,031	971	322	305	2,629
Net (reversal of impairment)/impairment of property, plant and equipment and intangibles	4	8	1	3,500	3,513
Exceptional items included in Depreciation, amortisation and impairments1	−	−	−	(3,500)	(3,500)
Underlying EBITDA	3,473	9,666	975	(239)	13,875

1       Refer to Exceptional items for further information.

2       Group and unallocated items includes functions, other unallocated operations, including Potash, Western Australia Nickel, legacy assets and consolidation adjustments.

 

Underlying EBITDA - Group and unallocated items

Half year ended 31 December 2024 US$M	Profit from operations	Exceptional items included in profit from operations1	Depreciation and amortisation	Net (reversal of)/impairments	Exceptional items included in Depreciation, amortisation and impairments1	Underlying EBITDA
Potash	(134)	−	1	−	−	(133)
Western Australia Nickel	(623)	320	−	(90)	90	(303)
Other2	(323)	72	261	23	−	33
Total	(1,080)	392	262	(67)	90	(403)
Half year ended 31 December 2023 US$M	Profit from operations	Exceptional items included in profit from operations1	Depreciation and amortisation	Net impairments	Exceptional items included in Depreciation, amortisation and impairments1	Underlying EBITDA
Potash	(130)	−	1	−	−	(129)
Western Australia Nickel	(3,740)	3,500	66	3,500	(3,500)	(174)
Other2	(205)	31	238	−	−	64
Total	(4,075)	3,531	305	3,500	(3,500)	(239)

1       Refer to Exceptional items for further information.

2       Other includes functions, other unallocated operations, legacy assets and consolidation adjustments.

60

 

BHP | Financial results for the half year ended 31 December 2024

Underlying EBITDA margin

Half year ended 31 December 2024 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations1	Total Group
Revenue - Group production	9,235	11,494	2,806	489	24,024
Revenue - Third-party products	1,030	14	−	108	1,152
Revenue	10,265	11,508	2,806	597	25,176
Underlying EBITDA - Group production	4,942	7,185	567	(406)	12,288
Underlying EBITDA - Third-party products	69	2	−	3	74
Underlying EBITDA2	5,011	7,187	567	(403)	12,362
Segment contribution to the Group's Underlying EBITDA3	39%	56%	5%		100%
Underlying EBITDA margin4	54%	63%	20%		51.1%
Half year ended 31 December 2023 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations1	Total Group
Revenue - Group production	7,435	14,050	3,786	726	25,997
Revenue - Third-party products	1,223	12	−	−	1,235
Revenue	8,658	14,062	3,786	726	27,232
Underlying EBITDA - Group production	3,445	9,667	975	(239)	13,848
Underlying EBITDA - Third-party products	28	(1)	−	−	27
Underlying EBITDA2	3,473	9,666	975	(239)	13,875
Segment contribution to the Group's Underlying EBITDA3	25%	68%	7%		100%
Underlying EBITDA margin4	46%	69%	26%		53.3%

1       Group and unallocated items includes functions, other unallocated operations, including Potash, Western Australia Nickel, legacy assets and consolidation adjustments.

2       We differentiate sales of our production (which may include third-party product feed) from direct sales of third-party products to better measure our operational profitability as a percentage of revenue. We may buy and sell third-party products to ensure a steady supply of product to our customers where there is occasional production variability or shortfalls from our assets.

3       Percentage contribution to Group Underlying EBITDA, excluding Group and unallocated items.

4       Underlying EBITDA margin excludes third-party products.

 

Effective tax rate

	2024				2023
Half year ended 31 December	Profit before taxation US$M	Income tax expense US$M	%		Profit before taxation US$M	Income tax expense US$M	%
Statutory effective tax rate	8,669	(3,384)	39.0		3,982	(2,276)	57.2
Adjusted for:
Exchange rate movements	−	48			−	(29)
Exceptional items1	762	(96)			6,620	(978)
Adjusted effective tax rate	9,431	(3,432)	36.4		10,602	(3,283)	31.0

1       Refer to Exceptional items for further information.

61

BHP | Financial results for the half year ended 31 December 2024

Non-IFRS financial information derived from Consolidated Cash Flow Statement

Capital and exploration expenditure

Half year ended 31 December	2024 US$M	2023 US$M
Capital expenditure (purchases of property, plant and equipment)	5,006	4,545
Add: Exploration and evaluation expenditure	199	199
Capital and exploration expenditure (cash basis)	5,205	4,744

 

Free cash flow

Half year ended 31 December	2024 US$M	2023 US$M
Net operating cash flows	8,317	8,884
Net investing cash flows	(5,669)	(5,079)
Free cash flow	2,648	3,805

 

Non-IFRS financial information derived from Consolidated Balance Sheet

Net debt and gearing ratio

	31 Dec 2024 US$M	31 Dec 2023 US$M	30 June 2024 US$M
Interest bearing liabilities - Current	491	2,839	2,084
Interest bearing liabilities - Non-current	19,704	19,565	18,634
Total interest bearing liabilities	20,195	22,404	20,718
Comprising:
Borrowing	17,704	18,826	17,602
Lease liabilities	2,491	3,578	3,116
Less: Lease liability associated with index-linked freight contracts	56	840	511
Less: Cash and cash equivalents	9,560	10,319	12,501
Less: Net debt management related instruments1	(1,394)	(1,183)	(1,395)
Less: Net cash management related instruments2	180	(220)	(19)
Less: Total derivatives included in net debt	(1,214)	(1,403)	(1,414)
Net debt	11,793	12,648	9,120
Net assets	49,597	45,591	49,120
Gearing	19.2%	21.7%	15.7%

1       Represents the net cross currency and interest rate swaps included within current and non-current other financial assets and liabilities.

2       Represents the net forward exchange contracts related to cash management included within current and non-current other financial assets and liabilities.

 

62

BHP | Financial results for the half year ended 31 December 2024

Net debt waterfall

	31 Dec 2024 US$M	31 Dec 2023 US$M
Net debt at the beginning of the period	(9,120)	(11,166)
Net operating cash flows	8,317	8,884
Net investing cash flows	(5,669)	(5,079)
Net financing cash flows	(5,270)	(5,983)
Net (decrease)/increase in cash and cash equivalents	(2,622)	(2,178)
Carrying value of interest bearing liability net repayments/(proceeds)	161	1,324
Carrying value of debt related instruments settlements/(proceeds)	147	−
Carrying value of cash management related instruments (proceeds)/settlements	(261)	(311)
Fair value change on hedged loans	90	(345)
Fair value change on hedging derivatives	(17)	323
Foreign currency exchange rate changes on cash and cash equivalents	(317)	74
Lease additions (excluding leases associated with index-linked freight contracts)	(180)	(298)
Transfer to liability directly associated with assets held for sale	−	69
Other	326	(140)
Non-cash movements	(98)	(317)
Net debt at the end of the period	(11,793)	(12,648)

 

Net operating assets

	31 Dec 2024 US$M	31 Dec 2023 US$M
Net assets	49,597	45,591
Less: Non-operating assets
Cash and cash equivalents	(9,560)	(10,319)
Trade and other receivables1	(10)	(12)
Other financial assets2	(1,648)	(1,197)
Current tax assets	(728)	(446)
Deferred tax assets	(61)	(76)
Assets held for sale3	−	(1,570)
Add: Non-operating liabilities
Trade and other payables4	249	272
Interest bearing liabilities	20,195	22,404
Other financial liabilities5	1,521	1,761
Current tax payable	1,048	290
Non-current tax payable	3	39
Deferred tax liabilities	3,537	3,325
Liabilities directly associated with the assets held for sale3	−	752
Net operating assets	64,143	60,814

1       Represents external finance receivable and accrued interest receivable included within other receivables.

2       Represents cross currency and interest rate swaps, forward exchange contracts related to cash management and investment in shares, other investments, deferred receivable from divestment of subsidiaries and operations and associated receivables contingent on outcome of future events relating to realised commodity prices.

3       Represents Blackwater and Daunia assets and liabilities classified as held for sale as at 31 December 2023 that were subsequently divested on 2 April 2024.

4       Represents accrued interest payable included within other payables.

5       Represents cross currency and interest rate swaps and forward exchange contracts related to cash management.

63

BHP | Financial results for the half year ended 31 December 2024

Other non-IFRS financial information

Principal factors that affect Revenue, Profit from operations and Underlying EBITDA

The following table describes the impact of the principal factors that affected Revenue, Profit from operations and Underlying EBITDA for half year ended 31 December 2024 and relates them back to our Consolidated Income Statement.

	Revenue US$M	Total expenses, Other income and Profit/(loss) from equity accounted investments US$M	Profit from operations US$M	Depreciation, amortisation and impairments and Exceptional Items US$M	Underlying EBITDA US$M
Half year ended 31 December 2023
Revenue	27,232
Other income		261
Expenses excluding net finance costs		(19,982)
(Loss)/profit from equity accounted investments, related impairments and expenses		(2,708)
Total other income, expenses excluding net finance costs and Profit/(loss) from equity accounted investments, related impairments and expenses		(22,429)
Profit from operations			4,803
Depreciation, amortisation and impairments				6,142
Exceptional item included in Depreciation, amortisation and impairments				(3,500)
Exceptional items				6,430
Underlying EBITDA					13,875
Change in sales prices	(2,430)	−	(2,430)	−	(2,430)
Price-linked costs	−	495	495	−	495
Net price impact	(2,430)	495	(1,935)	−	(1,935)
Change in volumes	1,382	(273)	1,109	−	1,109
Operating cash costs	−	(580)	(580)	−	(580)
Exploration and business development	−	(10)	(10)	−	(10)
Change in controllable cash costs1	−	(590)	(590)	−	(590)
Exchange rates	−	380	380	−	380
Inflation on costs	−	(335)	(335)	−	(335)
Fuel, energy, and consumable price movements	−	67	67	−	67
Non-cash	−	66	66	−	66
One-off items	−	−	−	−	−
Change in other costs	−	178	178	−	178
Asset sales	−	(17)	(17)	−	(17)
Ceased and sold operations	(938)	585	(353)	−	(353)
New and acquired operations	−	−	−	−	−
Other	(70)	165	95	−	95
Depreciation, amortisation and impairments	−	(40)	(40)	40	−
Exceptional items	−	5,876	5,876	(5,876)	−
Half year ended 31 December 2024
Revenue	25,176
Other income		222
Expenses excluding net finance costs		(16,367)
Profit/(loss) from equity accounted investments, related impairments and expenses		95
Total other income, expenses excluding net finance costs and Profit/(loss) from equity accounted investments, related impairments and expenses		(16,050)
Profit from operations			9,126
Depreciation, amortisation and impairments				2,592
Exceptional item included in Depreciation, amortisation and impairments				90
Exceptional items				554
Underlying EBITDA					12,362

1       Collectively, we refer to the change in operating cash costs and change in exploration and business development as Change in controllable cash costs. Operating cash costs by definition do not include non-cash costs. The change in operating cash costs also excludes the impact of exchange rates and inflation, changes in fuel, energy costs and consumable costs, changes in exploration and evaluation and business development costs and one-off items. These items are excluded so as to provide a consistent measurement of changes in costs across all segments, based on the factors that are within the control and responsibility of the segment.

 

64

BHP | Financial results for the half year ended 31 December 2024

Underlying return on capital employed (ROCE)

	31 Dec 2024 US$M	31 Dec 2023 US$M
Profit after taxation	5,285	1,706
Exceptional items1	666	5,642
Subtotal	5,951	7,348
Adjusted for:
Net finance costs	457	821
Exceptional items included within net finance costs1	(208)	(190)
Income tax expense on net finance costs	(106)	(187)
Profit after taxation excluding net finance costs and exceptional items	6,094	7,792
Annualised Profit after taxation excluding net finance costs and exceptional items	12,188	15,584
Net assets at the beginning of the period	49,120	48,530
Net debt at the beginning of the period	9,120	11,166
Capital employed at the beginning of the period	58,240	59,696
Net assets at the end of the period	49,597	45,591
Net debt at the end of the period	11,793	12,648
Capital employed at the end of the period	61,390	58,239
Average capital employed	59,815	58,968
Underlying Return on Capital Employed	20.4%	26.4%

1       Refer to Exceptional items for further information.

 

Underlying return on capital employed (ROCE) by segment

Half year ended 31 December 2024 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations1	Total Group
Annualised profit after taxation excluding net finance costs and exceptional items	4,228	8,864	438	(1,342)	12,188
Average capital employed	31,938	13,005	6,864	8,008	59,815
Underlying Return on Capital Employed	13%	68%	6%	−	20.4%
Half year ended 31 December 2023 US$M	Copper	Iron Ore	Coal	Group and unallocated items/ eliminations1	Total Group
Annualised profit after taxation excluding net finance costs and exceptional items	3,242	12,180	1,032	(870)	15,584
Average capital employed	31,029	14,406	6,743	6,790	58,968
Underlying Return on Capital Employed	10%	85%	15%	−	26.4%

1       Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (comprising Nickel West and West Musgrave, both transitioned into temporary suspension in the period ending Dec-2024), legacy assets and consolidation adjustments.

65

BHP | Financial results for the half year ended 31 December 2024

Underlying return on capital employed (ROCE) by asset

Half year ended 31 December 2024 US$M	Western Australia Iron Ore	Antamina	Escondida	Pampa Norte	BHP Mitsubishi Alliance	Copper South Australia	New South Wales Energy Coal1	Potash2	Western Australia Nickel3	Other	Total Group
Annualised profit after taxation excluding net finance costs and exceptional items	8,828	500	3,148	330	250	440	212	(302)	(750)	(468)	12,188
Average capital employed	19,855	1,451	10,717	4,280	6,749	15,085	(11)	6,803	110	(5,224)	59,815
Underlying Return on Capital Employed	44%	34%	29%	8%	4%	3%	−	−	−	−	20.4%
Half year ended 31 December 2023 US$M	Western Australia Iron Ore	Antamina	Escondida	Pampa Norte	BHP Mitsubishi Alliance	Copper South Australia	New South Wales Energy Coal1	Potash2	Western Australia Nickel3	Other	Total Group
Annualised profit after taxation excluding net finance costs and exceptional items	12,184	426	2,484	258	822	372	300	(258)	(514)	(490)	15,584
Average capital employed	19,718	1,382	10,693	4,221	6,903	14,462	(338)	4,859	1,648	(4,580)	58,968
Underlying Return on Capital Employed	62%	31%	23%	6%	12%	3%	−	−	(31%)	−	26.4%

1       NSWEC ROCE has not been shown as it is distorted by negative capital employed due to the rehabilitation provision being the primary balance remaining on Balance Sheet following previous impairments.

2       Potash ROCE has not been shown because it is distorted as the asset is non-producing and in its development phase.

3       Western Australia Nickel ROCE has not been shown following transition into temporary suspension.

Unit costs

Unit costs do not include the re-allocation to assets in HY2025 of the costs associated with the employee entitlements and allowances review conducted in FY2023, which were reported in Group and Unallocated in that period.

The calculation of Escondida, Spence and Copper South Australia unit costs are set out in the tables below.

	Escondida unit costs		Spence unit costs
US$M	H1 FY2025	H1 FY2024	H1 FY2025	H1 FY2024
Revenue	5,828	4,427	1,254	1,029
Underlying EBITDA	3,468	2,347	565	428
Gross costs	2,360	2,080	689	601
Less: by-product credits	336	248	64	49
Less: freight	120	89	29	22
Less: Government royalties	58	−	−	−
Net costs	1,846	1,743	596	530
Sales (kt)	629	523	135	121
Sales (Mlb)	1,387	1,152	297	268
Cost per pound (US$)1	1.33	1.51	2.01	1.98

1       H1 FY25 based on average realised exchange rates of USD/CLP 947 (H1 FY24 USD/CLP 874).

 

66

BHP | Financial results for the half year ended 31 December 2024

 

	Copper South Australia unit costs
US$M	H1 FY2025	H1 FY2024
Revenue	2,083	1,853
Underlying EBITDA	742	591
Gross costs	1,341	1,262
Less: by-product credits	728	596
Less: freight	15	28
Less: Government royalties	70	65
Less: re-allocation of costs associated with the employee entitlements and allowances review	1	11
Net costs	527	562
Sales (kt)	152	154
Sales (Mlb)	335	340
Cost per pound (US$)1	1.57	1.65

1       H1 FY25 based on an average realised exchange rate of AUD/USD 0.66 (H1 FY24 AUD/USD 0.65).

 

The calculation of WAIO unit costs is set out in the table below.

	WAIO unit costs
US$M	H1 FY2025	H1 FY2024
Revenue	11,430	13,991
Underlying EBITDA	7,140	9,646
Gross costs	4,290	4,345
Less: freight	1,152	979
Less: Government royalties	796	992
Less: re-allocation of costs associated with the employee entitlements and allowances review	18	33
Net costs	2,324	2,341
Sales (kt, equity share)	127,749	126,786
Cost per tonne (US$)1	18.19	18.46

1       H1 FY25 based on an average realised exchange rate of AUD/USD 0.66 (H1 FY24 AUD/USD 0.65).

The calculation of BMA unit costs is set out in the table below.

	BMA unit costs
US$M	H1 FY2025	H1 FY2024
Revenue	1,853	2,882
Underlying EBITDA	391	810
Gross costs	1,462	2,072
Less: freight	14	14
Less: Government royalties	291	631
Less: re-allocation of costs associated with the employee entitlements and allowances review	1	4
Net costs	1,156	1,423
Sales (kt, equity share)	8,999	11,031
Cost per tonne (US$)1	128.46	129.00

1       H1 FY25 based on an average realised exchange rate of AUD/USD 0.66 (H1 FY24 AUD/USD 0.65).

 

67

BHP | Financial results for the half year ended 31 December 2024

Definition and calculation of Non-IFRS financial information

Non-IFRS financial information	Reasons why we believe the non-IFRS financial information are useful	Calculation methodology
Underlying attributable profit	Allows the comparability of underlying financial performance by excluding the impacts of exceptional items and is also the basis on which our dividend payout ratio policy is applied.	Profit after taxation attributable to BHP shareholders excluding any exceptional items attributable to BHP shareholders.
Underlying basic earnings per share	On a per share basis, allows the comparability of underlying financial performance by excluding the impacts of exceptional items.	Underlying attributable profit divided by the weighted basic average number of shares.
Underlying EBITDA	Used to help assess current operational profitability excluding the impacts of sunk costs (i.e. depreciation from initial investment). Each is a measure that management uses internally to assess the performance of the Group's segments and make decisions on the allocation of resources.	Earnings before net finance costs, depreciation, amortisation and impairments, taxation expense, Discontinued operations and exceptional items. Underlying EBITDA includes BHP's share of profit/(loss) from investments accounted for using the equity method including net finance costs, depreciation, amortisation and impairments and taxation expense/(benefit).
Underlying EBITDA margin		Underlying EBITDA excluding third party product EBITDA, divided by revenue excluding third party product revenue.
Underlying EBIT	Used to help assess current operational profitability excluding net finance costs and taxation expense (each of which are managed at the Group level) as well as Discontinued operations and any exceptional items.	Earnings before net finance costs, taxation expense, Discontinued operations and any exceptional items. Underlying EBIT includes BHP's share of profit/(loss) from investments accounted for using the equity method including net finance costs and taxation expense/(benefit).
Profit from operations		Earnings before net finance costs, taxation expense and Discontinued operations. Profit from operations includes Revenue, Other income, Expenses excluding net finance costs and BHP's share of profit/(loss) from investments accounted for using the equity method including net finance costs and taxation expense/(benefit).
Capital and exploration expenditure	Used as part of our Capital Allocation Framework to assess efficient deployment of capital. Represents the total outflows of our operational investing expenditure.	Purchases of property, plant and equipment and exploration and evaluation expenditure.

 

 

68

 

BHP | Financial results for the half year ended 31 December 2024

 

Non-IFRS financial information	Reasons why we believe the non-IFRS financial information are useful	Calculation methodology
Free cash flow	It is a key measure used as part of our Capital Allocation Framework. Reflects our operational cash performance inclusive of investment expenditure, which helps to highlight how much cash was generated in the period to be available for the servicing of debt and distribution to shareholders.	Net operating cash flows less net investing cash flows.
Non-IFRS financial information	Reasons why we believe the non-IFRS financial information are useful		Calculation methodology
Net debt	Net debt shows the position of gross debt less index-linked freight contracts offset by cash immediately available to pay debt if required and any associated derivative financial instruments. Liability associated with index-linked freight contracts, which are required to be remeasured to the prevailing freight index at each reporting date, are excluded from the net debt calculation due to the short-term volatility of the index they relate to not aligning with how the Group uses net debt for decision making in relation to the Capital Allocation Framework. Net debt includes the fair value of derivative financial instruments used to hedge cash and borrowings to reflect the Group's risk management strategy of reducing the volatility of net debt caused by fluctuations in foreign exchange and interest rates. Net debt, along with the gearing ratio, is used to monitor the Group's capital management by relating net debt relative to equity from shareholders.		Interest bearing liabilities less liability associated with index-linked freight contracts less cash and cash equivalents less net cross currency and interest rate swaps less net cash management related instruments for the Group at the reporting date.
Gearing ratio			Ratio of Net debt to Net debt plus Net assets.
Net operating assets	Enables a clearer view of the assets deployed to generate earnings by highlighting the net operating assets of the business separate from the financing and tax balances. This measure helps provide an indicator of the underlying performance of our assets and enhances comparability between them.		Operating assets net of operating liabilities, including the carrying value of equity accounted investments and predominantly excludes cash balances, loans to associates, interest bearing liabilities, derivatives hedging our net debt, assets held for sale, liabilities directly associated with assets held for sale and tax balances.

 

69

 

BHP | Financial results for the half year ended 31 December 2024

 

Non-IFRS financial information	Reasons why we believe the non-IFRS financial information are useful	Calculation methodology
Underlying return on capital employed (ROCE)	Indicator of the Group's capital efficiency and is provided on an underlying basis to allow comparability of underlying financial performance by excluding the impacts of exceptional items.		Profit after taxation excluding exceptional items and net finance costs (after taxation) divided by average capital employed. Profit after taxation excluding exceptional items and net finance costs (after taxation) is profit after taxation excluding exceptional items, net finance costs and the estimated taxation impact of net finance costs. These are annualised for a half year end reporting period. The estimated tax impact is calculated using a prima facie taxation rate on net finance costs (excluding any foreign exchange impact). Average capital employed is calculated as the average of net assets less net debt for the last two reporting periods.
Adjusted effective tax rate	Provides an underlying tax basis to allow comparability of underlying financial performance by excluding the impacts of exceptional items.	Total taxation expense/(benefit) excluding exceptional items and exchange rate movements included in taxation expense/(benefit) divided by Profit before taxation excluding exceptional items.
Unit costs	Used to assess the controllable financial performance of the Group's assets for each unit of production. Unit costs are adjusted for site specific non-controllable factors to enhance comparability between the Group's assets.	Ratio of net costs of the assets to the equity share of sales tonnage. Net costs is defined as revenue less Underlying EBITDA and excludes freight, re-allocation of the costs associated with the employee entitlements and allowance review in FY2023, and other costs, depending on the nature of each asset. Freight is excluded as the Group believes it provides a similar basis of comparison to our peer group. The re-allocation to assets in FY2024 and FY2025 of the costs associated with the employee entitlements and allowances review in FY2023 are excluded in asset unit costs as these costs were already recognised in Group and Unallocated in FY2023.

 

70

 

BHP | Financial results for the half year ended 31 December 2024

 

Non-IFRS financial information	Reasons why we believe the non-IFRS financial information are useful	Calculation methodology
		Escondida, Spence and Copper South Australia unit costs exclude: ·      by-product credits being the favourable impact of by-products (such as gold or silver) to determine the directly attributable costs of copper production. ·      government royalties, as these are costs that are not deemed to be under the Group's control and the Group believes exclusion provides a similar basis of comparison to our peer group. WAIO and BMA unit costs exclude: government royalties, as these are costs that are not deemed to be under the Group's control and the Group believes exclusion provides a similar basis of comparison to our peer group.

 

Non-IFRS Financial Information Half year ended 31 December 2024

  

71

BHP | Financial results for the half year ended 31 December 2024

Definition and calculation of principal factors

The method of calculation of the principal factors that affect the period on period movements of Revenue, Profit from operations and Underlying EBITDA are as follows:

Principal factor	Method of calculation
Change in sales prices	Change in average realised price for each operation from the prior period to the current period, multiplied by current period sales volumes.
Price-linked costs	Change in price-linked costs (mainly royalties) for each operation from the prior period to the current period, multiplied by current period sales volumes.
Change in volumes	Change in sales volumes for each operation multiplied by the prior year average realised price less variable unit cost.
Controllable cash costs	Total of operating cash costs and exploration and business development costs.
Operating cash costs	Change in total costs, other than price-linked costs, exchange rates, inflation on costs, fuel, energy, and consumable price movements, non-cash costs and one-off items as defined below for each operation from the prior period to the current period.
Exploration and evaluation and business development	Exploration and evaluation and business development expense in the current period minus exploration and business development expense in the prior period.
Exchange rates	Change in exchange rate multiplied by current period local currency revenue and expenses.
Inflation on costs	Change in inflation rate applied to expenses, other than depreciation and amortisation, price-linked costs, exploration and business development expenses, expenses in ceased and sold operations and expenses in new and acquired operations.
Fuel, energy, and consumable price movements	Fuel and energy expense and price differences above inflation on consumables in the current period minus fuel and energy expense in the prior period.
Non-cash	Change in net impact of capitalisation and depletion of deferred stripping from the prior period to the current period.
One-off items	Change in costs exceeding a pre-determined threshold associated with an unexpected event that had not occurred in the last two years and is not reasonably likely to occur within the next two years.
Asset sales	Profit/(loss) on the sale of assets or operations in the current period minus profit/(loss) on sale of assets or operations in the prior period.
Ceased and sold operations	Underlying EBITDA for operations that ceased (including temporary suspension) or were sold in the current period minus Underlying EBITDA for operations that ceased (including temporary suspension) or were sold in the prior period.
New and acquired operations	Underlying EBITDA for operations that were acquired in the current period minus Underlying EBITDA for operations that were acquired in the prior period.
Share of profit/(loss) from equity accounted investments	Share of profit/(loss) from equity accounted investments for the current period minus share of profit/(loss) from equity accounted investments in the prior period.
Other	Variances not explained by the above factors.

 

 

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