BHP Reports 26% Profit Decline Amid Weakened Demand for Iron Ore, Coal

BHP Group, the world's largest mining company, has reported a 26% decline in annual profit, primarily due to weakened demand for its key export products, including iron ore and coking coal. The company's basic attributable profit for the fiscal year ending June 30 was 10.2 billion dollars, in line with analysts' expectations. BHP also announced a final dividend of 60 cents per share.

The company's revenue decreased by 4.4 billion dollars over the past 12 months, mainly due to lower prices for iron ore and coal. However, the rise in copper prices partially offset this impact. BHP has increased its net debt range from 5 billion to 15 billion dollars to 10 billion to 20 billion dollars.

The chief executive officer stated that the global economic outlook is mixed, but the company remains confident in the long-term fundamentals of steelmaking materials, copper, and fertilizers. BHP's copper business saw increased earnings during this period, as the metal has rapidly become one of its most important growth areas. The company is betting on increased demand as global electrification and decarbonization efforts progress.

Since achieving a record profit of 23.8 billion dollars during the iron ore demand surge in 2022, BHP's profitability has been on a downward trajectory. Reduced shareholder returns and rising capital expenditures have weighed on its stock value.

The prolonged real estate crisis has led to an oversupply of steel, dampening iron ore demand and capping prices. Coking coal, used in the steel industry's blast furnaces, also lacks upward momentum.

BHP noted that the external operating environment for the 2025 fiscal year will be influenced by complex and changing global conditions. Policy uncertainty, particularly surrounding tariffs, fiscal policy, monetary easing, and industrial policy, has intensified and continues to impact investment and trade flows.