BHP Group BHP reported underlying attributable profit from continuing operations of around $5.1 billion in the first half of fiscal 2025 (ended Dec. 31, 2024). The figure was 23% lower than a year ago, reflecting BHP’s productivity initiatives and cost discipline, and higher copper prices offset by lower iron ore and steelmaking coal prices as well as labor costs. Underlying earnings per share were $1.00 in the first half of fiscal 2025 compared with $1.30 in the prior-year period. Earnings per American Depositary Share (ADS) were $2.00 for the first half of fiscal 2025 compared with $2.59 in the first half of the previous fiscal. BHP’s ADS represents two fully-paid ordinary shares.
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In the period under discussion, BHP’s attributable profit (for total operations) surged 376% year over year to $4.4 billion, driven by disciplined cost control and strong operational performance. The company had reported an attributable profit of $927 million in the first half of fiscal 2024. The figure included an exceptional item of around $2.9 billion.
Low Iron Ore Prices Hurt BHP’s 1H25 Revenues
Revenues in the first half of fiscal 2025 totaled $25.18 billion, down 8% year over year. This reflected lower iron ore and steelmaking coal prices, partially offset by higher realized copper prices.
The Iron ore segment’s revenues were down 18.2% year over year to $11.5 billion, due to lower iron ore prices. The Copper segment reported revenues of $10.27 billion, up 18.6% year over year on higher copper prices.
Revenues in the Coal segment slumped 26% year over year to $2.8 billion, reflecting lower Steelmaking coal prices.
BHP’s Underlying EBITDA Down 11%
Profit from operations was $9.1 billion in the first half of fiscal 2025 compared with $4.8 billion in the last fiscal year’s comparable period.
Underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) declined 11% year over year to $12.36 billion owing to lower revenues. The underlying EBITDA margin was 49.1% compared with 51% in last year’s comparable period.
For the Iron ore segment, underlying EBITDA slumped 25.6% year on year to $7.2 billion. The Copper segment’s underlying EBITDA was up 44.3% to $5 billion on higher sales and volumes. The Coal segment’s underlying EBITDA was $0.57 billion, which marked a substantial drop from $0.98 billion in the first half of fiscal 2024.
BHP’s Financial Position
As of Dec. 31, 2024, BHP Group had cash and cash equivalents of $9.56 billion, down from $12.4 billion as of June 30, 2024. In the half year ended Dec. 31, 2024, the company generated $11.8 billion of net operating cash flow, lower than the $12.4 billion recorded in the prior-year comparable period. The decline was due to lower realized prices, particularly in iron ore.
Free cash flow for the period under discussion was $2.6 billion. Net debt was $11.8 billion at the end of the first half of fiscal 2025, lower than $12.6 billion at the end of the first half of fiscal 2024.
BHP’s board has announced an interim dividend of 50 cents per share, which is equivalent to a total payout of $2.5 billion (payout ratio of 50%). Capital and exploration spending was $5.2 billion in the first half of fiscal 2025, which was 10% higher year over year. BHP has earmarked capital and exploration expenditures of $10 billion for fiscal 2025 and $11 billion for fiscal 2026.
BHP’s FY25 Production Guidance
BHP’s iron ore production guidance for fiscal 2025 is 255-265.5 Mt. WAIO's production is expected in the band of 250-260 Mt (282-294 Mt on a 100% basis).
The company expects copper production to be within the range of 1,845-2,045 kt in fiscal 2025.
Steelmaking coal production in fiscal 2025 is now expected to be in the upper half of the range of 16.5-19 Mt (33 -38 Mt on a 100% basis). Energy coal production is also expected to be in the upper half of the company’s range of 13 - 15 Mt.
BHP’s Cost Guidance for FY25
Unit cost guidance for WAIO is in the range of $18.00-$19.50 per ton. Escondida unit cost is estimated to be in the band of $1.30-$1.60 per pound. Spence unit costs are expected to be between $2.00 and $2.30 per pound. Copper South Australia’s unit cost is anticipated to be between $1.30 and $1.80 per pound. BMA unit cost is expected to be between $112 and $124 per ton.
BHP’s Price Performance
BHP Group's shares have lost 14.6% over the past year compared with the industry’s 8.7% decline.
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BHP’s Zacks Rank & Stocks to Consider
BHP currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Performances of BHP’s Peers
Freeport-McMoRan Inc. FCX recorded net income of $274 million or 19 cents per share for fourth-quarter 2024, down around 29.3% from $388 million or 27 cents per share in the year-ago quarter.
Revenues declined nearly 3.1% year over year to $5,720 million. The figure missed the Zacks Consensus Estimate of $5,921.9 million. The company witnessed lower copper sales in the reported quarter.
Southern Copper Corporation SCCO reported fourth-quarter 2024 earnings of $1.01 per share, which marginally missed the Zacks Consensus Estimate of $1.02. The bottom line, however, marked a 74% surge from the year-ago quarter. Results were driven by higher sales volumes for copper, zinc and silver as well as improved prices. SCCO’s fourth-quarter performance was partially hurt by a decline in the molybdenum sales volume.
The company posted sales of $2.784 billion, which beat the consensus estimate of $2.780 billion. The top line increased 21.3% year over year.
BHP’s Peer Awaiting Results
Vale S.A VALE is set to report fourth-quarter 2024 results on Feb. 19, after market close. The Zacks Consensus Estimate for Vale’s sales is pegged at $10.08 billion, indicating a 23% decrease from the year-ago quarter's figure. The consensus mark for earnings has moved down 13% over the past 60 days to 53 cents per share. The figure indicates a 5.4% year-over-year decline.
VALE's earnings missed the Zacks Consensus Estimate in two of the trailing four quarters and beat the mark in the other two, delivering an average negative surprise of 0.98%.
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