The BHP Group Ltd (ASX: BHP) share price is under the spotlight after reporting its FY25 result and a lower dividend.
BHP is one of the largest mining companies in the world, with significant iron ore and copper exposure.
BHP FY25 result
Let’s look at some of the main highlights from the 12 months to 30 June 2025:
- Revenue declined 8% to US$51.3 billion
- Underlying EBITDA (EBITDA explained) fell 10% to US$26 billion
- Profit from operations increased 11% to US$19.5 billion
- Underlying attributable profit fell 26% to US$10.2 billion
- Attributable profit increased 14% to US$9 billion
- Final dividend per share declined 19% to US$0.60
- Full-year dividend per share down 15% to US$1.10
BHP said that it delivered another year of strong operational performance, with record copper and iron ore production volume and increased steelmaking coal production.
Despite that, revenue decreased US$4.4 billion largely because of a decline in iron ore and coal prices. This was partially offset by higher copper prices.
BHP said it has enabled it to lower its unit costs across the global rate of inflation of around 3.1%, with its Western Australian Iron Ore (WAIO) maintaining its position as the lowest cost major iron ore producer globally where it delivered 290mt of production. Escondida and Copper SA delivered 18% and 14% reductions in unit costs respectively.
Profitability
The underlying EBITDA decreased 10% because of the lower revenue. Copper contributed 45% of group underlying EBITDA, increasing 44% to a record US$12.3 billion.
Iron ore underlying EBITDA declined 24% to US$14.4 billion, coal underlying EBITDA fell 75% and nickel declined 95% to US$0.6 billion.
The company’s statutory financials included a number of exceptional items, which is why the underlying and statutory figures are different. It reported $621 million of a hit related to the Western Australian nickel temporary suspension and the Samarco dam failure. There was also another $703 million of impairments/expenses related to the Samarco dam failure.
Investing
The miner said it continues to invest in growth. In each of the next two years it expects to spend US$11 billion on capital and exploration, reducing to US$10 billion on average each year between FY28 to FY30.
The Jansen project in Canada is estimated to deliver the first potash production by mid-2027.
It also said it’s optimising its growth program at Escondida in Chile, Copper South Australia has the potential to double production through phased expansions, and the Vicuna project in Argentina is advancing towards a multi-decade copper opportunity.
At WAIO, over the medium-term it’s targeting sustained production of more than 305mt per year.
Outlook for the BHP share price
The BHP CEO Mike Henry said:
The global economic outlook is mixed. Growth is expected to ease to 3% or slightly below in the near-term amid shifting trade policies, yet demand for commodities remains strong, particularly in China and India. Chinese copper demand outperformed in FY25, while iron ore demand was resilient, driven by strong infrastructure investment and manufacturing activity in China. Steelmaking coal prices have softened due to oversupply, though policy shifts in China and new blast furnace capacity in Asia are expected to support the market. Potash markets are expected to continue to benefit from a growing and wealthier population and the need for more sustainable agriculture.
We remain confident in the long-term fundamentals of steelmaking materials, copper and fertilisers, which are critical to global growth, urbanisation and the energy transition. Backed by a diversified portfolio of large, long-life assets, disciplined low-cost operations and a strong balance sheet, BHP is well-positioned to deliver enduring value through the cycle.
The more the business can diversify its earnings away from iron ore, the better, in my opinion. I don’t think the iron ore price is going to go up significantly any time soon because of how iron ore supply is rising but Chinese demand hasn’t been enough to push it higher.
The BHP share price isn’t attractive to me right now, with its limited prospects for earnings growth without stronger resource prices. I like the focus on copper and the longer-term outlook for that resource with electrification, though iron ore is still a major part of the business and a drag.
There are other ASX dividend shares I’d prefer to buy.
