Trading Day – BHP hits record profits and US homebuilder sentiment turns negative.

BHP Group, the world’s second-biggest miner, posted its highest ever full-year profit amid record commodity prices.

The National Association of Home Builders and Wells Fargo Housing Market Index dropped by 6 points to 49, putting it in negative territory. 

Here is the biggest news of the day.

• BHP reports record profit. The mining giant reported total earnings of $23.8 billion for the year, beating analyst expectations of $21.6 billion. Earnings per share (EPS) were $6.11, up 173% from last year. BHP also declared a dividend of $1.75. The share price jumped 5.5% in early trading on the Australian Stock Exchange.
• US homebuilder sentiment turns negative for the first time since Covid. The National Association of Home Builders / Wells Fargo Housing Market Index dropped by 6 points to 49. Anything below 50 is considered negative. This is the eighth month in a row that the index has declined.
• The water level of the Rhine river is dropping at an alarming rate. The river is crucial to trade in Western Europe, connecting Switzerland and large parts of Western Germany to Rotterdam, Europe’s biggest port. Data released by the German government warned that the water level at Kaub would decline below 40cm, which becomes impractical and uneconomical for many ships to move across the river. Now that same marker has dropped to 30cm. Many businesses are currently exploring their options for rail transit or smaller shallow-water barges, which will raise the price to transport goods.
• Fitch and S&P consider Ukraine to be in default on their bonds after the country entered into a debt restructuring agreement with its creditors that will result in a two-year freeze on repayments. The credit rating agencies considered the move a sign of distressed debt. Subsequently, they lowered Ukraine’s credit rating from C to RD (Restricted Default) and CC/C to SD/SD (Selective Default), respectively. The country faces an economic contraction of 35% – 45% this year due to the war.
• HomeChoice International shows an increase in earnings. The company reported a rise in revenue of 4% to R1.8 billion for their half-year results. Earnings per share increased 25.4% to R1.44, and the company declared an interim dividend of R0.64, up from R0.47 last year.
• Ayo Technology Solutions and African Equity Empowerment Investments walk away from their deal to acquire Italian Summer. The deal was announced on 19 July and would have been acquired through SGT, a company owned 40% by AYO and 60% by AEEI. The companies did not elaborate on the reasons for the cancellation, other than noting that the Conditions Precedent were not fulfilled.