BHP Profit Swells on Surging Iron Ore Prices

BHP reported strong financial results with a 24% increase in return on capital and reduced net debt. Despite a 16% rise in underlying profit, results fell short of expectations due to write-downs in the thermal coal business and charges related to COVID and the Samarco Dam failure. Strong iron ore prices, driven by Chinese demand, boosted BHP's cash flow. The company plans to increase capital expenditure and explore new projects, including the South Flank iron ore expansion and Janssen potash. CEO Mike Henry remains optimistic about the global economy and commodity demand.

What was one of the main reasons for the drop in BHP's first half net profit?

• Decreased demand for iron ore

• Higher operational costs

• Write-downs in the thermal coal business

• Increased competition

How did BHP benefit from Chinese demand in the first half?

• By shipping a record amount of iron ore

• By increasing coal production

• By expanding into new markets

• By reducing operational costs

What is the expected first output year for the South Flank iron ore project?

• 2023

• 2022

• 2021

• 2020

What is the Janssen potash project expected to become for BHP?

• A replacement for coal

• A new competitor

• A fifth pillar of business

• A temporary investment

What is the general outlook for the global economy and commodity demand according to Mike Henry?

• Negative

• Uncertain

• Stable

• Very positive