BHP Reports 23% Decline in Earnings in First Half of FY25

Core Insights - BHP Group reported an underlying attributable profit of approximately $5.1 billion for the first half of fiscal 2025, a 23% decrease from the previous year, influenced by productivity initiatives and cost discipline, alongside fluctuating commodity prices [1][5][3] Financial Performance - Attributable profit for total operations surged 376% year over year to$ 4.4 billion, driven by disciplined cost control and strong operational performance, compared to $927 million in the first half of fiscal 2024 [2] - Revenues for the first half of fiscal 2025 totaled$ 25.18 billion, an 8% decline year over year, primarily due to lower iron ore and steelmaking coal prices, partially offset by higher copper prices [3] - The Iron ore segment's revenues decreased by 18.2% year over year to $11.5 billion, while the Copper segment reported an 18.6% increase in revenues to$ 10.27 billion [3][6] - Underlying EBITDA fell 11% year over year to $12.36 billion, with an EBITDA margin of 49.1% compared to 51% in the previous year [5] - The Coal segment's revenues dropped 26% year over year to$ 2.8 billion due to lower steelmaking coal prices [4] Operational Metrics - Profit from operations was $9.1 billion in the first half of fiscal 2025, up from$ 4.8 billion in the same period last year [5] - Underlying EBITDA for the Iron ore segment decreased by 25.6% to $7.2 billion, while the Copper segment's EBITDA increased by 44.3% to$ 5 billion [6] Financial Position - As of December 31, 2024, BHP had cash and cash equivalents of $9.56 billion, down from$ 12.4 billion as of June 30, 2024, with net operating cash flow of $11.8 billion [7] - Free cash flow for the period was$ 2.6 billion, and net debt was $11.8 billion, reduced from$ 12.6 billion a year earlier [8] - The board announced an interim dividend of 50 cents per share, totaling a payout of $2.5 billion [8] Capital Expenditures - Capital and exploration spending reached$ 5.2 billion in the first half of fiscal 2025, a 10% increase year over year, with planned expenditures of $10 billion for fiscal 2025 and$ 11 billion for fiscal 2026 [9] Production Guidance - BHP's iron ore production guidance for fiscal 2025 is set between 255-265.5 million tons, with copper production expected to be in the range of 1,845-2,045 thousand tons [10][11] Cost Guidance - Unit cost guidance for WAIO is projected between $18.00-$ 19.50 per ton, with various cost estimates for copper and coal segments provided [12] Stock Performance - BHP's shares have declined by 14.6% over the past year, compared to an 8.7% decline in the industry [13]