BHP Group FY25 Earnings & Revenues Decline Due to Lower Prices

BHP Group reported a 26% YoY decrease in underlying attributable profit to $10.2 billion in FY25 due to lower iron ore and coal prices. Revenues fell 8% YoY to $51.3 billion, missing the consensus estimate. The company delivered record iron and copper production volumes, partially offsetting the decline. Underlying EBITDA decreased 10.6% to $26 billion, and the EBITDA margin slipped to 53%.

BHP Group, a leading mining company, has reported a significant decline in its underlying attributable profit for the financial year 2025 (FY25), ending on June 30. The company's profit fell by 26% year-over-year (YoY) to $10.16 billion, marking its lowest full-year profit since 2020 [1]. This substantial decrease was primarily driven by a 19% decrease in the average realized price for iron ore, which significantly impacted the company's revenue and profitability.

BHP's revenue for FY25 dropped by 8% YoY to $51.3 billion, missing the consensus estimate. The company's underlying earnings before interest, taxation, depreciation, and amortization (EBITDA) decreased by 10.6% to $26 billion, while the EBITDA margin slipped to 53%. Despite these challenges, BHP delivered record production volumes for iron and copper, with iron ore production increasing by 10% and copper production surpassing 2 million tonnes for the first time [2].

The decline in BHP's profit can be attributed to several factors, including weaker iron ore prices due to oversupply concerns and reduced demand from China. The increased iron ore production from Australia, Brazil, and South Africa, combined with lower steel output in China, weighed on prices throughout the financial year. This impacted major miners, including BHP and Rio Tinto. The company's underlying attributable profit was down from $13.66 billion in the previous year, marking its lowest performance since 2020 [1].

BHP also reduced its final dividend to $0.60 per share, down from $0.74 a year earlier, bringing the total annual payout to $1.10—the lowest since 2017. Data from the IndexBox platform shows subdued global iron ore demand, reinforcing the challenges faced by major producers [1].

In response to these challenges, BHP is focusing on cost management and operational efficiency to improve its financial performance. The company has outlined plans to reduce its costs and improve its operational performance to mitigate the impact of lower commodity prices.

References:
[1] https://www.indexbox.io/blog/bhp-group-reports-smallest-annual-profit-in-five-years/
[2] https://www.mining-technology.com/news/bhp-profit-falls-lower-iron-ore-prices/