Welcome to the Fear and Greed Business Interview. I'm Sean Elmam. Yesterday, mining giant BHP handed down its full year profit, highlighting what a bahemoth it is in the iron ore industry. Today's interview with the miners chief financial officer gives a great insight into just how efficient BHP has become at mining iron ore. This earning season, We've been working with the team at osbiz to bring new interviews with the leaders of some of Australia's biggest companies. Osbiz is Australia's leading provider of live and on demand video of the latest news in Australian business, markets, economy and startups. Sign up at Osby's dot com dot au as well, it's free. Andrew Gagan spoke with Vendida Pant, BHP's chief financial officer about the company's results, the importance of the Australian iron ore assets, still demand in China, the success of the copper business, and the failed bid for Anglo American.

Welcome to the Fear and Greed Business Interview. I'm Sean Elmam. Yesterday, mining giant BHP handed down its full year profit, highlighting what a bahemoth it is in the iron ore industry. Today's interview with the miners chief financial officer gives a great insight into just how efficient BHP has become at mining iron ore. This earning season, We've been working with the team at osbiz to bring new interviews with the leaders of some of Australia's biggest companies. Osbiz is Australia's leading provider of live and on demand video of the latest news in Australian business, markets, economy and startups. Sign up at Osby's dot com dot au as well, it's free. Andrew Gagan spoke with Vendida Pant, BHP's chief financial officer about the company's results, the importance of the Australian iron ore assets, still demand in China, the success of the copper business, and the failed bid for Anglo American.

BHP has posted fullyion net profit of seven point nine billion US dollars. That's down thirty nine percent year on year, well booked underlying profit of thirteen point seven billion US, which was ahead of estimates. The Minding Giant declared a final dividend of seventy four US censors share. When added to February's interim dividends, share holders will received a dollar forty six lower than the dollars seventy paid to investors last year. Overall, the group saw revenue rise three percent to fifty five point seven billion US dollars. It's improved its net debt position to be carrying nine point one billion US, and the company says the external operating environment remains volatile, with demand for commodities being relatively soft over the calend of years twenty three and twenty four. It expects copper to be in marginal servilus, while China's on automand is forecast to be lower than it is today. Well, let's get some further detail on that. BHP's chief financial officer, Vandida Punt joins us. Now if I did it, welcome, Thanks so much for joining us. Congratulations on the results. There's a lot of gloom being priced into iron Ore at the moment. What did iron Or deliver for the company and shells over the past year?

BHP has posted fullyion net profit of seven point nine billion US dollars. That's down thirty nine percent year on year, well booked underlying profit of thirteen point seven billion US, which was ahead of estimates. The Minding Giant declared a final dividend of seventy four US censors share. When added to February's interim dividends, share holders will received a dollar forty six lower than the dollars seventy paid to investors last year. Overall, the group saw revenue rise three percent to fifty five point seven billion US dollars. It's improved its net debt position to be carrying nine point one billion US, and the company says the external operating environment remains volatile, with demand for commodities being relatively soft over the calend of years twenty three and twenty four. It expects copper to be in marginal servilus, while China's on automand is forecast to be lower than it is today. Well, let's get some further detail on that. BHP's chief financial officer, Vandida Punt joins us. Now if I did it, welcome, Thanks so much for joining us. Congratulations on the results. There's a lot of gloom being priced into iron Ore at the moment. What did iron Or deliver for the company and shells over the past year?

Thank you, Andrew. That is Woodles of cash.

Thank you, Andrew. That is Woodles of cash.

We have performed really well this year with the strong financials and operations coming through. As you mentioned, underlying profit being two percent year on ear and earnings per share being higher two percent as well hear on ear and all that is happening because we have great assets like Western Australia iron Ore that you mentioned, and our team do an incredible job of running them really well with real cost discipline as well as our cost capital a location which really is very thoughtful around putting money back into the balance sheet, giving solid returns to our shareholders and going for value in growth.

We have performed really well this year with the strong financials and operations coming through. As you mentioned, underlying profit being two percent year on ear and earnings per share being higher two percent as well hear on ear and all that is happening because we have great assets like Western Australia iron Ore that you mentioned, and our team do an incredible job of running them really well with real cost discipline as well as our cost capital a location which really is very thoughtful around putting money back into the balance sheet, giving solid returns to our shareholders and going for value in growth.

If I talk.

If I talk.

About our assets, what operationally went well? Iron or Western Australia iron Ore assets, which are a flagship asset for US, delivered another record production volume and not only that for the fourth year running.

About our assets, what operationally went well? Iron or Western Australia iron Ore assets, which are a flagship asset for US, delivered another record production volume and not only that for the fourth year running.

Operations are the lowest cost iron.

Operations are the lowest cost iron.

O producer globally, which is a fantastic place to be in. In Copper also, the company did very well. We have had second consecutive year of nine person growth in Copper and next year we are forecasting another four years.

O producer globally, which is a fantastic place to be in. In Copper also, the company did very well. We have had second consecutive year of nine person growth in Copper and next year we are forecasting another four years.

And what does this mean.

And what does this mean.

This means that overall operating cash flow from the business was more than twenty billion dollars last year, and all that resulted into dividends of a seven point four billion US dollars which equates to a full year dividend offer two dollars sixteen for our seventeen million Australian shareholders, either directly or those who hold us through their supers.

This means that overall operating cash flow from the business was more than twenty billion dollars last year, and all that resulted into dividends of a seven point four billion US dollars which equates to a full year dividend offer two dollars sixteen for our seventeen million Australian shareholders, either directly or those who hold us through their supers.

So you expect the iole market to be in surplus this calendar year, what impact is that going to have on earnings?

So you expect the iole market to be in surplus this calendar year, what impact is that going to have on earnings?

So we do expect that in O market will be a little bit in surplus this year. But if I step back, this is a view we have had for a very long time, and as the plateauing of steel demand in China happens, the overall surplus in iron ore continues. However, However, quite a few of the end users of steel are doing very well in China infrastructure, machinery, auto, shipbuilding. The sector which is weak is property, and that is only twenty percent of the overall steel demand in China. But if I were to step back on what does this mean for BHP? We are in fantastic shape because being the lowest cost producer of iron ore and this year actually widening our gap with our next best competitor, we are at C one cost of only US dollar fifteen point eight four per ton. This means that iron ore business will continue to be a great business for US. If I step back, I think the hallmark of BHP has been our consistency and delivery. So for last fifteen years, our cash flows have been more than fifteen billion dollars except for one year, and that is the consistency that you need when there is volatility and market dynamics can change, and that's the resilience that BHP offers.

So we do expect that in O market will be a little bit in surplus this year. But if I step back, this is a view we have had for a very long time, and as the plateauing of steel demand in China happens, the overall surplus in iron ore continues. However, However, quite a few of the end users of steel are doing very well in China infrastructure, machinery, auto, shipbuilding. The sector which is weak is property, and that is only twenty percent of the overall steel demand in China. But if I were to step back on what does this mean for BHP? We are in fantastic shape because being the lowest cost producer of iron ore and this year actually widening our gap with our next best competitor, we are at C one cost of only US dollar fifteen point eight four per ton. This means that iron ore business will continue to be a great business for US. If I step back, I think the hallmark of BHP has been our consistency and delivery. So for last fifteen years, our cash flows have been more than fifteen billion dollars except for one year, and that is the consistency that you need when there is volatility and market dynamics can change, and that's the resilience that BHP offers.

So, given that forecast of surplus for iron ore, what's your productions? Because certainly some analysts perceive your result here what you've had to say is that this essentially is the end of the iron ore booms. Is that the way you see it.

So, given that forecast of surplus for iron ore, what's your productions? Because certainly some analysts perceive your result here what you've had to say is that this essentially is the end of the iron ore booms. Is that the way you see it.

Well, when you are a lowest cost producer of iron ore, this is not the end of the story at all. In fact, I would say that after the fourth year record production, we are looking to creep up to three zero five million tons over a period of time with very low cost and low capital intensity iron ore volumes to come in. So expanding that with that view because this is a real cash flow business which is very generative. Equally, we will continue to be very disciplined on cost and iron ore. But iron ore is one part of the big story for us, and very clearly, as you would have seen today, we have announced quite a few details of our copper business and very excited about attractive returns in copper, which.

Well, when you are a lowest cost producer of iron ore, this is not the end of the story at all. In fact, I would say that after the fourth year record production, we are looking to creep up to three zero five million tons over a period of time with very low cost and low capital intensity iron ore volumes to come in. So expanding that with that view because this is a real cash flow business which is very generative. Equally, we will continue to be very disciplined on cost and iron ore. But iron ore is one part of the big story for us, and very clearly, as you would have seen today, we have announced quite a few details of our copper business and very excited about attractive returns in copper, which.

Is a critical of the critical.

Is a critical of the critical.

Minerals we have in South Australia, in Chile and with a investment which we have recently done in Argentina.

Minerals we have in South Australia, in Chile and with a investment which we have recently done in Argentina.

Well.

Well.

In fact, to that point, then where do you think BHP's future lies. Is it less about iron ore and perhaps more about those future facing metals such as copper.

In fact, to that point, then where do you think BHP's future lies. Is it less about iron ore and perhaps more about those future facing metals such as copper.

So iron o will remain a fantastic business for BHP for decades to come. But as we have always said that, we also want to grow into future facing commodities, that's copper, that's potash. Potash project in Canada is going very well and first production of Jansen is Less is almost two years away, and hence it will come in and we will be at the lowest end of the cost cuff in copper, which we really like as a commodity because not only for our traditional way of living, but also from the world which is decarbonizing as well as more use of AI and data centers. All of that requires a lot of copper, so we are really attracted to that commodity.

So iron o will remain a fantastic business for BHP for decades to come. But as we have always said that, we also want to grow into future facing commodities, that's copper, that's potash. Potash project in Canada is going very well and first production of Jansen is Less is almost two years away, and hence it will come in and we will be at the lowest end of the cost cuff in copper, which we really like as a commodity because not only for our traditional way of living, but also from the world which is decarbonizing as well as more use of AI and data centers. All of that requires a lot of copper, so we are really attracted to that commodity.

And it's fantastic that we are.

And it's fantastic that we are.

The largest holders of copper resources.

The largest holders of copper resources.

In the world.

In the world.

Not only that in the last two years we have added three hundred thousand tons of production in copper, being already one of the largest copper producers. But what we are really excited about, Andrew, is the growth which is coming. We have today given details that here in Australia, in South Australia copper essayesset, we are looking to grow from our three twenty three forty thousand tons two almost doubling that copper production by middle of next decade. And in Chile, where we have a fantastic copper business as well, looking to grow over this period as well, and that would make that we could go towards a two million ton production for copper in a decade or so. So very excited about future facing commodities.

Not only that in the last two years we have added three hundred thousand tons of production in copper, being already one of the largest copper producers. But what we are really excited about, Andrew, is the growth which is coming. We have today given details that here in Australia, in South Australia copper essayesset, we are looking to grow from our three twenty three forty thousand tons two almost doubling that copper production by middle of next decade. And in Chile, where we have a fantastic copper business as well, looking to grow over this period as well, and that would make that we could go towards a two million ton production for copper in a decade or so. So very excited about future facing commodities.

Are you still keeping options open as far as perhaps some acquisitional growth in the copper space. Given your failed bid for Anglo American, would you be willing to return to that once that becomes avail again. Given the UK regulations where you can return to that bid. I guess in November you're still keeping your options open there or perhaps looking elsewhere.

Are you still keeping options open as far as perhaps some acquisitional growth in the copper space. Given your failed bid for Anglo American, would you be willing to return to that once that becomes avail again. Given the UK regulations where you can return to that bid. I guess in November you're still keeping your options open there or perhaps looking elsewhere.

So, Andrew, we were disappointed that that deal did not go through because it did have a strategic logic to it. Not only that, we were very clear that that combination could really unlock a lot of value for our shareholders and for their shareholders. But since then they are executing their plan, and as you can see in our own results today, we are executing our plans.

So, Andrew, we were disappointed that that deal did not go through because it did have a strategic logic to it. Not only that, we were very clear that that combination could really unlock a lot of value for our shareholders and for their shareholders. But since then they are executing their plan, and as you can see in our own results today, we are executing our plans.

We have always said that.

We have always said that.

BHP's biggest lever of growth is our productivity as well as our own organic growth options, and that is a very big landscape for us to grow from, which we are doing equally. Since then, as you would have seen, we have also increased our stake and looked at acquisition now which is still to close on Philow, which could become a real world class, multi generational copper base in Argentina. So very excited about our copper plans.

BHP's biggest lever of growth is our productivity as well as our own organic growth options, and that is a very big landscape for us to grow from, which we are doing equally. Since then, as you would have seen, we have also increased our stake and looked at acquisition now which is still to close on Philow, which could become a real world class, multi generational copper base in Argentina. So very excited about our copper plans.

And so then, did you feel, as our shareholders, be willing to sacrifice some dividends there to fund your future growth and also see that you'd be happy to move above your net debt target temporarily you say to execute value a creative opportunities, So on both fronts, you're happy with that position.

And so then, did you feel, as our shareholders, be willing to sacrifice some dividends there to fund your future growth and also see that you'd be happy to move above your net debt target temporarily you say to execute value a creative opportunities, So on both fronts, you're happy with that position.

So we know how important dividends are to our shareholders, so this is a very important consideration we keep in mind. But equally, as yourself said, Andrew, are balance sheeted, really resilient and strong, just nine point one billion dollars of net debt, which means that we have a lot of flexibility on really investing for value for attractive options in growth, but equally being able to robustly continue to do share cash returns to our shareholders. Very mindful of that, and for that we have an approach which is called Capital Alocation Framework, which makes sure we maximize use of our capital available every six months.

So we know how important dividends are to our shareholders, so this is a very important consideration we keep in mind. But equally, as yourself said, Andrew, are balance sheeted, really resilient and strong, just nine point one billion dollars of net debt, which means that we have a lot of flexibility on really investing for value for attractive options in growth, but equally being able to robustly continue to do share cash returns to our shareholders. Very mindful of that, and for that we have an approach which is called Capital Alocation Framework, which makes sure we maximize use of our capital available every six months.

That was Van Dedit de Pant, chief financial officer at BHP, speaking to Andrew Gagan from Osby's sign up at Osby's dot com dot au. It's free. This is a Fear and Greed Daily interview. Join us every morning for the full episode of Fear and Greed Daily Business use for people who make their own decisions. I'm sure Elma enjoy today.

That was Van Dedit de Pant, chief financial officer at BHP, speaking to Andrew Gagan from Osby's sign up at Osby's dot com dot au. It's free. This is a Fear and Greed Daily interview. Join us every morning for the full episode of Fear and Greed Daily Business use for people who make their own decisions. I'm sure Elma enjoy today.