BHP Details Latest Results and Strategic Direction
Mike Henry, BHP Chief Executive Officer, issued a statement detailing the company's latest results and strategic direction, emphasizing a strong focus on operational excellence, social value creation, and targeted growth.
Strategic Focus and Operational Highlights
BHP continues to execute its strategy focusing on operational excellence, social value creation, and growth in copper and potash. Copper production has increased by 30% over the last four years, signaling a significant pivot for the mining giant.
This half, copper contributed 51% of BHP's Underlying EBITDA, becoming the largest share of overall earnings.
Identified as the world's largest copper producer, BHP has increased its FY26 group copper guidance to 1.9 – 2.0 Mt. This strong performance is supported by operations at Escondida and other sites in Chile and South Australia. The company anticipates higher long-term copper prices and is strategically positioned to capture these with four growth options across Chile, Argentina, Arizona, and South Australia.
The Jansen Stage 1 potash project is expected to achieve first production and revenue in mid-CY27. Following a definitive updated cost estimate, project expenditure for Jansen Stage 1 has increased to $US8.4 billion.
BHP's Western Australia iron ore business recorded record first-half production and shipments, maintaining its position as a low-cost iron ore producer. Investments include adding a sixth rail car dumper at Port Hedland to support increased volumes exceeding 305 Mt.
Financial Performance
At a Group level, BHP reported a safe and reliable half with resilient margins and cash flows.
- Underlying EBITDA increased 25% to $US15.5 billion, achieving an Underlying EBITDA margin of 58%.
- Underlying Attributable profit increased over 20% to $US6.2 billion.
- Underlying Return on Capital Employed (ROCE) rose by approximately 3 percentage points to about 24%.
The company generated US$9.4 billion in operating cash and concluded the half with net debt of $US14.7 billion, comfortably within its target range of $US10–20 billion.
An interim dividend of US 73 cents per share was determined, representing a 60% payout ratio.
Capital and Asset Management
BHP announced a silver streaming agreement related to its share of Antamina's future silver production. This follows a December agreement concerning its share of WAIO's inland power consumption.
These agreements aim to improve financial flexibility and unlock value, projected to unlock over $US6 billion of cash, with potential to reach up to $US10 billion.
Economic Outlook
BHP anticipates approximately 3% global economic growth in CY26. China's economy showed resilience in the past year, and India continues to outperform, contributing to an economic backdrop considered supportive for key commodities.
The company emphasizes productivity and cost discipline in a structurally higher cost environment, leveraging its low-cost, diversified portfolio.
Its growth pipeline includes expansion of existing Tier 1 assets and new projects such as Jansen, Vicuña, and Resolution.