This is our first report on the world’s largest mining player, BHP Group. The company has been performing more or less on par with expectations in the past few quarters. The management has simplified and increased their agility by unifying their company structure. The benefits of the weaker Australian and Chilean currencies relative to the U.S. dollar helped to counteract pressures from general inflation and rising input costs for commodities. It is important to note that the switch to 100% renewable energy at Escondida and Spence resulted in cost savings of more than $100 million this year. Besides, Western Australian Iron Ore maintained its good performance, aided by record sales volumes of 284 million tonnes. The management further intends to invest in their steelmaking inputs, which are still crucial for the energy shift. Accelerated sustaining mine development and ongoing capital-efficient debottlenecking work are required to increase Western Australian Iron Ore production to 300 million or more annually in the medium term. Additionally, research is being done on their 330 million tonnes per year alternative. We initiate coverage on the stock of BHP Group with a ‘Hold’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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