The BHP Group Ltd (ASX: BHP) share price could be on the move today following the release of its first quarter update.
How did BHP perform in the first quarter?
BHP had a solid start to the new financial year. During the first quarter it delivered production which was largely in line with expectations.
Petroleum production came in at 29 MMboe, which was down 1% from the previous quarter. This was due to the impact of Tropical Storm Barry in the Gulf of Mexico and planned maintenance at North West Shelf. Which was partially offset by higher seasonal demand and less maintenance activity at Bass Strait.
BHP’s Copper production came in at 430kt, which was down 3% on the June quarter. Record concentrator throughput at Escondida was offset by planned maintenance related to the refinery crane replacement at Olympic Dam.
The miner reported Iron Ore production of 61Mt, down 3% since the June quarter. This was down to significant planned maintenance at Port Hedland.
BHP also reported a 21% decline in Metallurgical Coal and a 24% reduction in Energy Coal production. This was due to maintenance and adverse weather.
Finally, Nickel production was down 25% to 22Kt. These volumes reflected the impact of planned maintenance and a transition to new ore bodies.
BHP Chief Executive Officer, Andrew Mackenzie, was pleased with the company’s first quarter and revealed that it is on track to achieve its guidance in FY 2020.
He said: “We delivered a solid start to the 2020 financial year through ongoing strong operational performance across our portfolio. While Group production for the quarter decreased slightly due to the expected impacts of planned maintenance and natural field decline in Petroleum, guidance remains unchanged and we are on track to deliver slightly higher volumes than last financial year.”
Should you invest?
Overall, I thought this was yet another solid quarter from BHP.
In light of this, I continue to believe that it is a great option for investors that are wanting exposure to the resources sector along with Rio Tinto Limited (ASX: RIO).
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.