Profits at BHP have tumbled to a five-year nadir as weakened iron ore prices and economic uncertainty have battered the mining behemoth.
The company delivered underlying attributable earnings of $10.2bn (£7.6bn) for the year ending June, marking a 26% retreat from the previous year and representing the poorest performance since the pandemic’s onset in 2020, as reported by City AM.
Turnover dropped 8% to $51.3bn, whilst BHP’s final dividend of 60 cents per share—a decline of almost one-fifth—represented its weakest payout in eight years, although it marginally exceeded analyst forecasts.
BHP lamented a persistent decline in iron ore valuations, noting that global appetite remained “mixed.
“Demand from developing Asian economies continued to grow along with new blast furnace capacity, while Developed Asia and European demand was impacted by planned blast furnace capacity retirements and maintenance in response to subdued steel demand,” the miner said.
“Rising trade protectionism could weigh on global iron ore and steel demand in the near term,” BHP warned, adding: “Policy uncertainty, particularly around tariffs, fiscal policy, monetary easing, and industrial policy, has been elevated and continues to influence investment and trade flows.”
The Australian mining colossus noted that diminished iron ore valuations had been counterbalanced by elevated copper prices, with the firm boosting its copper output by 28% since 2022 to achieve a new milestone. Shares in BHP have risen by 1.6% to A$42 in Sydney, marking a 5.4% increase since the beginning of the year, following a recovery from an April slump triggered by Donald Trump’s “Liberation Day” tariff announcements.
Last April, BHP attempted a £31bn takeover of London-listed rival Anglo American, which was dismissed as “highly unattractive.”
A second, improved offer made in May was also turned down.
BHP warns on Chinese demand
BHP has issued a warning regarding Chinese demand, stating that China’s economic growth in H1 2025 had “exceeded expectations” bolstered by increased government support for steel-intensive industries such as machinery and car production.
However, the company warned that growth in China, one of its largest markets, is likely to slow in the second half of the year “as the temporary boost from ‘pulled-forward’ exports fades and tariffs continue to take effect.”
In the long term, BHP anticipates that population growth, urbanisation, rising living standards, and the infrastructure required for digitalisation and decarbonisation will all drive demand for steel, non-ferrous metals and fertilisers.
Adam Vettese, a market analyst for eToro, commented: “Ultimately, BHP offers resilience and defensive attributes that appeal to long term investors, even as near-term profits are hit by commodity weakness.
“The company’s evolving focus on future facing commodities and its operational flexibility leave it well placed to benefit when the cycle turns. Investors will need to accept some short-term pain for the longer-term opportunity, but BHP’s scale, asset quality and strategy underpin a compelling investment case as the energy transition accelerates.”
