BHP Group Ltd on Tuesday lowered its dividend after its annual profit declined by a quarter, reflecting volatile commodity prices and rising costs.

The Melbourne-based miner said pretax profit slumped 25% to $16.04 billion for the financial year that ended June 30 from $21.40 billion a year earlier, as it faced escalating costs.

Expenses, excluding net finance costs, rose 15% to $36.75 billion from R 31.87 billion. Loss from equity accounted investments, related impairments and expenses was $2.65 billion, swung from profit of $594 million.

Revenue rose 3.4% to $55.65 billion from $53.81 billion, driven mainly by higher prices of iron ore and copper. These rises were partially offset by lower energy coal and nickel prices, and lower steelmaking coal volumes following the divestment of Blackwater and Daunia mines in April.

BHP said its external operating environment in 2024 financial remained relatively volatile, with key commodity prices mixed.

Underlying earnings before interest, tax, depreciation and amortisation was up 3.6% to $29.0 billion from $28.0 billion.

BHP declared a final divided of 74 US cents, down 7.5% from 80 cents. This dragged down by 14% its total annual payout to 146 cents from 170 cents.

Earnings per share dropped 39% to 155.8 cents from 255.2 cents.

BHP said it has a pipeline of copper projects under development in Chile and Australia.

The negative impact of inflation on its cost base continues to recede, but some elements remain a concern, the company said, adding it expects the lagged effect of inflation to continue to flow into 2025 financial.

The labour market remains a core inflationary concern, it warned.

Over the long term, the outlook for its key commodities remains positive, BHP said.

BHP shares were up 1.4% to 2,109.00 pence in London and up 0.3% at R 493.00 in Johannesburg early Tuesday. They closed up 1.3% at A$41.35 in Sydney.

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