BHP Group (NYSE:BHP) reported higher earnings, cash flow and shareholder returns for fiscal 2026, supported by stronger copper prices, record iron ore production in Western Australia and continued cost discipline across its portfolio.
Chief Executive Officer Brandon Craig said the company produced about 2 million tonnes of copper for the second consecutive year, making it the world’s largest copper producer. Copper contributed more than half of BHP’s annual EBITDA for the first time, while Western Australia Iron Ore, or WAIO, delivered record production.
“The only acceptable number is zero, and we are not there yet,” Craig said of the company’s safety performance.
Profit, Cash Flow and Dividend
Chief Financial Officer Vandita Pant said underlying EBITDA rose 27% to $33 billion for the fiscal year, with a margin of nearly 60%. Underlying attributable profit increased 30% to $13 billion, while return on capital employed reached 26%.
Total attributable profit, including exceptional items, rose 9% to nearly $10 billion. The result included a $2.3 billion non-cash impairment related to the Jansen potash project.
BHP ended the year with net debt below $9 billion. The board determined a final dividend of $5 billion, or $0.99 per share for the June half, bringing the full-year dividend to $8.7 billion, its highest level in four years. Pant said the dividend was supported by operating results and proceeds from the Antamina silver streaming agreement.
- Underlying EBITDA: $33 billion, up 27%
- Underlying attributable profit: $13 billion, up 30%
- Total attributable profit: nearly $10 billion, up 9%
- Return on capital employed: 26%
- Full-year dividend: $8.7 billion
Higher commodity prices aided the result, with copper prices up 35% and iron ore prices up 3%, according to Pant. She said group unit costs improved by more than 6% despite currency pressures, inflation and higher diesel and asset prices.
Copper Leads Portfolio Performance
BHP’s copper business generated a record $18 billion in EBITDA, representing 54% of group EBITDA, at a 70% margin. Pant said Escondida’s unit costs improved 10%, while Copper South Australia’s unit costs improved by more than 70%, aided by $4.5 billion in by-product contributions across the copper business.
At Olympic Dam in South Australia, BHP delivered its highest production in 20 years. Unit cost fell to $0.32 per pound, supported by $2.3 billion in by-product revenue, resulting in records for EBITDA and free cash flow, Craig said.
WAIO recorded production and shipment records and remained the world’s lowest-cost major iron ore producer for a seventh consecutive year, Pant said. Its C1 unit costs rose just 1% during the year, and the business generated approximately $10 per tonne more free cash flow than its closest peer, according to Craig.
In steelmaking coal, BMA production has increased 10% over the past two years, Pant said, while stripping volumes reached their highest level in five years. Craig said BHP’s improvement plan for BMA does not include selling the business.
Operating System and Technology Targets
Craig said BHP is seeking to accelerate safety, productivity and growth through its BHP Operating System, or BOS, and expanded technology deployment. Since 2020, BHP’s Operational Excellence Index score has increased to 52 from 36, with about 7,000 initiatives generating more than $5 billion in first-year cost savings.
The company is targeting an Operational Excellence Index score of 65, which Craig described as beyond the level considered world-leading under external benchmarks. Technology initiatives were generating incremental EBITDA at an annual run rate of nearly $500 million by the end of fiscal 2026, and BHP aims to increase that figure to more than $650 million by the end of fiscal 2027.
Pant said BHP expects to generate about $50 billion of attributable free cash flow at spot prices during the next five years after funding growth investments. Under a sustained multiyear downside commodity-price scenario, the company still expects approximately $15 billion in free cash flow over that period.
Growth Spending Focused on Copper and Potash
BHP expects average capital expenditure of about $11 billion annually over the medium term, in nominal terms at constant foreign-exchange rates. More than half of growth spending will go to copper, rising to roughly two-thirds when non-operated joint ventures are included.
Craig said BHP’s portfolio is estimated to deliver annual growth of 3% to 4% from 2027 through 2035, including roughly 5% annual growth in copper. The company’s lower-risk copper pathway targets about 50% growth by the mid-2030s, reaching around 2.5 million tonnes per year of attributable copper-equivalent production.
BHP approved about $500 million of pre-commitment funding for a new concentrator at Escondida and expects a final investment decision in 2027 or 2028. The company is also advancing the Vicuña copper joint venture with Lundin Mining, which has received environmental approval for stage one, approval under Argentina’s RIGI fiscal-stability program and a royalty agreement with San Juan province. A stage-one investment decision could come as early as the end of the calendar year.
Meanwhile, Jansen Stage 1 remains on track for first production in the middle of the next calendar year. Once ramped up, each stage is expected to generate about $1 billion in annual EBITDA with margins above 60%, Craig said.
About BHP Group (NYSE:BHP)
BHP Group is an Anglo-Australian natural resources company engaged principally in the exploration, development, production and marketing of commodities. Its core businesses include the extraction and processing of iron ore, copper, metallurgical and thermal coal, nickel and other minerals. BHP operates large-scale mining and processing assets and supplies raw materials used across steelmaking, energy and industrial supply chains.
The company has a global operating footprint with significant assets and projects in Australia and the Americas, and commercial activities that serve customers worldwide.
