BHP Shares Gain Ground on FY25 Report, Dividend Declines

BHP Group (LON:BHP) experienced a positive market reaction following the release of its FY25 results on Tuesday, driven by record operational performance and strong capital discipline, despite a decrease in revenue.

The final dividend of $0.60 per share, while representing a 60% payout ratio, narrowed investor sentiment about BHP's financial prospects.

Revenue reached $51.3 billion, an 8% decrease from FY24's $55.7 billion. Attributable profit increased by 14% to $9.0 billion, up from $7.9 billion. Underlying attributable profit, however, declined by 26% to $10.2 billion. Profit from operations rose 11% to $19.5 billion, while underlying EBITDA decreased by 10% to $26.0 billion.

The underlying EBITDA margin remained robust at 53%, consistent with the prior year, demonstrating operational efficiency. Earnings per share basic came in at 177.8 cents, up from 155.8 cents, while underlying earnings per share were 200.2 cents, compared to 269.5 cents in FY24.

The announcement of a final dividend of $0.60 per share, totaling $3.0 billion, is payable on September 25, 2025.

Operational excellence remains a key driver. Record copper and iron ore production volumes, along with increased steelmaking coal production, underpinned the company's performance.

Unit costs decreased by approximately 4.7% across major assets, outpacing the global inflation rate of approximately 3.1%. Copper's contribution to Group Underlying EBITDA increased significantly, reaching a record $12.3 billion and comprising 45% of the total.

Driver Breakdown:

• Record Production: Copper and iron ore volumes reached new highs.
• Cost Discipline: Unit costs lowered across major assets.
• Copper Strength: Increased contribution to overall EBITDA.

AskTraders Takeaway:

The strong operational performance and cost management provide a solid foundation for BHP; however, softened commodity prices remain a risk factor.

BHP Chief Executive Officer Mike Henry noted that, “Against a backdrop of global uncertainty this strong performance has led to robust financial outcomes and reflects the resilience of BHP’s business and strategy. We met full-year production guidance across all assets, and set new records in copper and iron ore.”

The outlook remains mixed, with global economic growth expected to ease amid shifting trade policies. However, demand for commodities, particularly in China and India, is anticipated to remain strong.

BHP continues to invest in growth projects, with planned capital and exploration expenditure of US$11 billion in each of the next two years, reducing to an average of US$10 billion per year between FY28 and FY30.