The BHP Group Ltd (ASX: BHP) share price went up by 10.9% in March 2022. The resources giant outperformed the S&P/ASX 200 Index (ASX: XJO).
During March, the ASX 200 went up by 6.4%. That means that the resources giant outperformed the ASX 200 by 4.5% over the month.
What could have helped the BHP share price?
March was dominated by news of the Russian invasion of Ukraine.
BHP produces several commodities including iron ore and petroleum. The iron ore price rose from US$142 per tonne to around US$150 over the month.
The petroleum price rose amid concerns regarding global supply as sanctions were applied to Russia.
Other commodity prices remain high, such as coal. BHP also produces nickel and copper, which are seeing growing demand as the world looks to decarbonise.
The company paid its interim dividend on 28 March 2022, after the recent FY22 half-year result.
BHP didn't announce any market-sensitive news during March that may have impacted the BHP share price. However, the company did release a presentation after the market had closed on 28 February, explaining its HY22 performance and the long-term outlook.
HY22 highlights and outlook
The commodity giant said that it had a strong first half of production, with disciplined cost control. Its earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to 64%.
BHP decided to pay an interim dividend of US$1.50 per share, which represented a payout ratio of 78%.
In terms of the outlook, BHP said that it could benefit from the power of scale and compound growth.
The ASX mining share stated that "population growth, decarbonisation and rising living standards will drive demand for energy, metals and fertilisers for decades."
BHP said the world population is expected to grow from 7.7 billion to 8.5 billion by 2030. This is expected to lead to increasing demand, with world GDP growing from US$87 trillion to US$161 trillion by 2030. Capital expenditure is expected to grow from US$23 trillion to US$37 trillion by 2030.
Commodity comments
BHP also said in the presentation that it is actively managing its portfolio for long-term value creation through the cycle.
With iron ore, it said that it's the lowest cost major globally, with no new hubs needed for at least a decade.
It described its metallurgical coal, which is used to make steel, as a world-class resource with high-quality coal that benefits from "sustained price differentials".
The resources business has divested some of its commodities. It will soon divest its petroleum assets to Woodside Petroleum Limited (ASX: WPL). It is also in the process of selling its energy and lower quality metallurgical coal operations.
BHP is also looking to increase exposure to future-facing commodities including copper, nickel and potash.
The company ended its presentation by saying that it has levers to deliver value growth, "increasing options through productivity, internal resources and external opportunities across varying time horizons."
It claimed to grow shareholder value (meaning things like dividends and the BHP share price) through "operational excellence, optimal excellence, optimal allocation of capital and sustainably creating high returns."
