BHP Group delivered impressive financial results with underlying profit rising 30% to $13.20 billion for the 12 months through June, surpassing the Visible Alpha consensus of $12.66 billion and significantly above last year's $10.16 billion. The most significant development was copper operations delivering operating profit that surpassed traditional mainstay iron ore for the first time, becoming the group's largest profit engine. This symbolic shift reflects the company's strategic pivot toward electrification metals as copper prices soared to record highs above $14,000 per tonne over the past 12 months, driven by rapid expansion of artificial intelligence data centers, accelerating global clean energy transition, and surging investment in power grid modernization. The copper-related operations (including byproducts such as gold and uranium) generated $18.19 billion in operating earnings, surpassing iron ore's $14.53 billion as BHP's top earnings driver. According to the latest earnings call transcript, copper contributed more than half of annual EBITDA for the first time, with the copper business generating $18 billion of EBITDA at a 70% margin. Latest reports indicate copper EBITDA increased to $18.2 billion from $12.3 billion a year earlier, with revenue climbing to $29 billion supported by higher realised copper prices, though production fell 3% to 1.95 million tonnes. CEO Brandon Craig emphasized that "Copper is the engine that is driving BHP's growth" as the company implements an ambitious expansion strategy targeting 3% to 4% copper equivalent growth per year up to 2035.
After accounting for exceptional items including a $2.3 billion write-down on its Jansen potash project and Samarco dam failure costs, attributable profit increased 9% to just under $10 billion. The company announced a final dividend of 99 cents, marking its highest payout in four years with a 72% payout ratio, bringing the full-year distribution to $1.72 per share. According to the earnings call, BHP delivered $8.7 billion in full-year dividends, representing the highest payout in four years. The company's return on capital employed reached 26%, while return on equity stood at 21%, demonstrating efficient capital deployment. The results showed underlying EBITDA of $32.9 billion, up 27% year over year, with margins close to 60%. The company's price-to-earnings ratio of 21.97 reflects investor confidence in earnings quality, while the dividend yield of 3.27% with a market capitalization of $231 billion indicates strong shareholder returns. Sydney-listed BHP shares rose 3.6% to $64.41 by 00:42 GMT following the results announcement. The BHP Group share price has thumped the S&P/ASX 200 index with a gain of 50% over the past 12 months.
Despite ongoing challenges in China's property sector and Beijing's tightened procurement controls, BHP's flagship Western Australia Iron Ore (WAIO) operations demonstrated resilience during the period. The operations generated $14.67 billion in operating earnings in the year, up 2% from last year and in line with Visible Alpha consensus of $14.75 billion. The miner highlighted significant value unlocking potential, stating it could unlock up to an additional $3.5 billion in value from its WAIO assets through active capital portfolio and asset management. Most recently, Global Infrastructure Partners (GIP) invested $2 billion in the project's inland power network for a minority stake. As per the earnings call, Western Australia Iron Ore remained the company's most important cash engine and maintained its spot as the world's lowest-cost major iron ore producer for a seventh consecutive year. The operations achieved record production and shipments with WAIO C1 unit costs up only 1% while production and shipments hit records, demonstrating strong operational efficiency. The company achieved a 6% unit cost reduction across major assets, further lifting sector-leading profit margins.
New CEO Brandon Craig, who took over in July, is implementing an ambitious copper expansion strategy that targets 3% to 4% copper equivalent growth per year up to 2035, as reported by CNBC TV18. Craig emphasized that copper remains the biggest growth opportunity across Australia, Chile, and Argentina, citing strong demand expectations from artificial intelligence, energy security, and long-term trends. The company expects to increase annual copper production by up to 40% to 2 million tonnes per year by 2035, with copper demand projected to grow from approximately 34 million tonnes per year currently to over 50 million tonnes per year by 2050. According to the latest earnings call, the copper portfolio is expected to support a lower-risk pathway to about 2.5 million tons a year of attributable copper-equivalent production by the mid-2030s, roughly 50% above current levels. The company's growth pipeline should deliver 3% to 4% annual growth from 2027 through 2035, with copper growing about 5% a year. Craig noted this represents the same scale as Escondida, but with a 100% BHP-owned position compared to Escondida's 57% stake. The company continues to seek M&A and partnership opportunities globally to secure its dominant position in the copper supply chain, with last year's unsuccessful takeover bid for peer Anglo American signaling strong appetite for copper assets.
BHP's financial performance demonstrated exceptional cash generation capabilities with group-wide unit costs improving 6% despite facing currency pressure, inflation, and higher diesel and asset prices. The company expects to generate around $50 billion of attributable free cash flow over the next five years at spot prices, even after funding growth investments. According to CFO Vandita Pant, the company still expects around $15 billion of free cash flow under a sustained multi-year downside commodity scenario, providing significant resilience. The company maintains a robust balance sheet with net debt falling to $8.69 billion at the end of fiscal 2026, below both the targeted range of $10 billion to $12 billion and the Visible Alpha consensus estimate of $9.10 billion. BHP's capital expenditure is expected to average around $11 billion per year over the medium term, with more than half of growth spend going to copper and approximately two-thirds if including investment in non-operated joint ventures. The company continues to unlock value from its capital base, with potential to unlock around $10 billion in undervalued capital, with $6.3 billion of this already executed in the last nine months. For fiscal 2027, BHP expects copper production of 1.65 million to 1.8 million tonnes, with lower grades at its Escondida mine weighing on output, while BMA metallurgical coal production is forecast at 18.5 million to 20.5 million tonnes. Management flagged ongoing commitment to climate and social value goals, including operational GHG emissions reduction and deepening Indigenous partnerships.
