BHP Group Ltd (ASX: BHP) shares are pushing higher on Thursday.
In morning trade, the mining giant's shares are up almost 1% to $45.
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Why are BHP shares rising?
Investors have been buying BHP shares today after the miner delivered a fourth-quarter and full-year update largely in line with expectations.
For the 12 months ended 30 June, BHP achieved its full-year production guidance for copper, iron ore, metallurgical coal and energy coal. In addition, BHP's nickel business achieved its revised guidance and finished in line with the lower end of the original guidance.
Another positive is that despite inflationary pressures, BHP's full-year unit cost guidance is expected to be achieved at Escondida, WAIO and New South Wales Energy Coal (NSWEC). The only disappointment was the BHP Mitsubishi Alliance (BMA), which is expected to have costs marginally above its revised guidance range.
In respect to debt, BHP advised that its net debt balance at 30 June 2023 is expected to be between US$11 billion and US$11.5 billion. However, looking ahead, it is expected to remain towards the upper end of its target range of US$5 billion to US$15 billion in the near term.
Broker response
The team at RBC has been looking over the update and was relatively pleased with what it saw. The broker highlights that BHP "is continuing to execute in its key areas."
However, it suspects that BHP's net debt guidance could be a sign that its near-term dividends may not be as generous as some in the market are expecting. RBC believes that this could indicate that "higher costs/capex [are] coming."
In light of this, investors may want to keep an eye on consensus estimates for dividends in the coming weeks ahead of the release of its results next month.
