BHP Earnings Slide 26% Amid Chinese Slowdown, BHG JSE Share Price Shows Mixed Reaction
BHP Group’s latest financial report highlights a year of mixed fortunes, with falling iron ore prices weighing heavily on earnings while...
Quick overview
- BHP Group's FY2025 results showed a 26% decline in underlying net profit due to falling iron ore prices, despite a rise in copper volumes.
- The total dividend for FY2025 was reduced to USD 1.10 per share, reflecting the company's commitment to shareholders amid challenging market conditions.
- Market reactions were mixed, with BHP shares experiencing initial gains on the ASX, while institutional investors hold over 72% of the stock, indicating strong support.
- Looking ahead, BHP plans to increase capital spending to USD 11 billion over the next two years while targeting USD 3 billion in cost savings by 2030.
BHP Group’s latest financial report highlights a year of mixed fortunes, with falling iron ore prices weighing heavily on earnings while copper provided a degree of resilience.
Earnings Under Pressure but Dividends Up
The company’s FY2025 results underscored the challenges of operating in a weaker pricing environment. Underlying net profit after tax fell 26% to USD 10.2 billion, or roughly USD 2 per share, as lower realized prices for iron ore more than offset gains from higher copper volumes. Revenue also slipped, reflecting weaker coal markets alongside iron ore.
In line with softer earnings, the total dividend for FY2025 was reduced to USD 1.10 per share, with a final payout of USD 0.60 fully franked. This marked a pullback from the prior year, although the payout ratio was held at 60%, suggesting BHP remains committed to rewarding shareholders even through a more challenging period.
Market Reaction and Share Performance
The earnings announcement generated mixed responses across different listings. On the JSE, BHG shares initially rose before retreating, while on the ASX, BHP climbed 2% following the results, signaling confidence in the group’s outlook.
BHG Chart Daily – Trend Has Shifted After Moving Above MAs
Notably, BHG shares reversed their downtrend in April 2025, gaining momentum after key moving averages turned into support in July. The rally has accelerated through August, and sentiment remains bullish, with investors anticipating further upside as dividends continue to provide a cushion.
BHP Group FY2025 Results: Weaker Profits, Lower Dividend Amid Iron Ore Pressures
Key Financial Highlights
- Revenue: US$51.3 billion, down 8% YoY.
- Underlying Profit After Tax: Dropped 26% to US$10.2 billion, compared to US$13.7 billion in FY24.
- Attributable Profit: Rose 14% to US$9 billion.
- Underlying EBITDA: Declined 10% to US$26 billion.
- Underlying EPS: Fell to US$2.02, from US$2.70 a year earlier.
Dividend Update
- Final Dividend: US$0.60 per share, payable 25 September.
- Total FY25 Dividend: US$1.10 per share (55% payout), down from US$1.46 in FY24 (60% payout ratio this year).
- Operational & Market Factors
- Underlying profit decline mainly due to iron ore price pressures and sluggish Chinese demand.
- Average iron ore price: Down 19% YoY.
- Copper prices: Provided partial offset with stronger performance.
Capital Allocation
- BHP to increase spending to US$11 billion over the next two years.
- Plans to cut US$3 billion between 2028 and 2030.
Institutional Shareholder Influence
Ownership trends add another layer of strength to the narrative. Institutions hold over 72% of BHG Group AB’s stock, making them the most powerful investor group in steering sentiment and stability. With the company’s market value recently reaching kr4.4 billion, institutional investors were the main beneficiaries of a strong one-year return of 58%, further reinforcing confidence in the company’s trajectory.
Outlook: Looking forward, BHP’s strategy balances short-term resilience with long-term efficiency. The company has outlined a capital spending plan of USD 11 billion over two years, while also committing to USD 3 billion in cost savings between 2028 and 2030. Although the near-term environment remains pressured by global uncertainty and subdued Chinese demand, copper strength and institutional backing suggest that the group is well-positioned to sustain growth momentum.
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