BHP profit tops estimates as copper powers growth, to pay highest dividend in 4 years
BHP Group reported better-than-expected full-year earnings and declared its highest annual dividend in four years, boosted by record copper prices that cemented the metal's lead over iron-ore as the miner's biggest earnings driver.
CEO Brandon Craig, who took the top job at the world's biggest listed mining company last month, underlined BHP's project pipeline that could boost its copper production by as much as 40% by 2035, even as production falls in the short term.
"Copper, iron, steelmaking coal and potash are foundational to the way the world is developing. That is why we are moving as fast as we can and bringing these commodities to market," he told reporters.
BHP on Tuesday reported a 30% rise in full-year underlying attributable profit of $13.2-billion for the year ended June 30, above the Visible Alpha consensus of $12.66-billion.
It announced a final dividend of 99 cents per share, bringing the full-year distribution to $1.72 apiece, the highest in four years, the miner said.
BHP shares rallied as much as 4.2% to a two-month high of A$64.79.
"Loved the dividend, a big beat on that," said portfolio manager Andy Forster of Argo Investments in Sydney, which holds BHP shares.
"Solid overall, and copper doing all the work," he said of the results, adding that BHP was emphasising longer-term growth, even though final investment decisions had not yet been made and capital spending was expected to rise by more than $1-billion next year.
Copper prices have climbed to record highs above $14 000 a ton this year, triggered by the rapid pace of energy-hungry AI data centre buildouts and the global shift toward cleaner power, intensifying miners' race to secure high-grade copper assets.
Craig said BHP always watched for market opportunities, but it was roughly five times more expensive to buy copper assets than build.
The red metal, including byproducts such as gold and uranium, generated $18.19-billion in operating earnings in the year, surpassing iron ore's $14.53-billion as BHP's top earnings driver.
BHP expects copper demand to grow to more than 50-million tons a year by 2050 from 34-million tons this year.
IRON-ORE OPERATING EARNINGS RISE
BHP's iron-ore business in Western Australia is facing challenges from industrial action, but Craig said the miner did not expect any negative effect from the first major strikes at Port Hedland in decades as talks continue on Tuesday.
As for its biggest customer, China's state iron-ore buyer, BHP is focused on efficient markets, rather than forming a combined selling desk with other miners, Craig said.
BHP's flagship Western Australia Iron Ore operations generated $14.67-billion in operating earnings in the year, up 2% from last year and in line with the Visible Alpha consensus of $14.75-billion.
The miner said it had $3.5-billion remaining that it could unlock through active capital portfolio and asset management as part of a $10-billion opportunity it had identified.
Most recently, Global Infrastructure Partners (GIP) invested $2-billion for a minority stake in the business' inland power network.
The miner's net debt at the end of the 2026 financial year fell to $8.69-billion, below both the target range of $10-billion to $12-billion and the Visible Alpha consensus estimate of $9.1-billion.
METALLURGICAL COAL SALE SPECULATION DOUSED
Craig doused some reports that BHP could review its Queensland metallurgical coal operations for a possible sale over the next one to five years. He said the assets would be an important part of BHP's portfolio if markets developed as the miner expected.
Reuters reported on Monday that Canadian uranium miner NexGen Energy was sharing information and "talking regularly" with BHP about its Rook I uranium project in Saskatchewan.
In response, Craig said BHP would "continue to study" other commodity options but would not speculate further.
