BHP Group reported a 30% rise in annual profit to $13.2 billion, supported by strong copper and iron ore prices. New CEO Brandon Craig has announced an ambitious plan to grow copper production by 3-4% annually through 2035. While the company announced its highest dividend in four years, investors are weighing the strategy against operational risks and the need for significant capital spending on aging mines.
BHP Group delivered a strong financial performance for the 2026 fiscal year. Underlying attributable profit grew 30% to $13.2 billion, beating market expectations. Revenue also climbed, reaching $58.8 billion, representing a 15% increase compared to the previous year. This growth was largely fueled by rising copper prices, which helped the company post solid results despite mixed performance in other segments.
Copper Becomes Primary Engine
Copper has become the most important part of the business, now contributing 54% of the company's underlying EBITDA. This is a significant shift, as the miner has historically relied heavily on iron ore. Realized prices for copper surged 35% during the period, highlighting the metal's role as the primary driver of revenue and earnings growth.
CEO's Growth Vision
Under new CEO Brandon Craig, who took the helm in July 2026, the company is looking to scale its copper operations. The management team has set a target of 3-4% annual growth in copper-equivalent production through 2035. The firm aims for a total output increase of 40-50% by the mid-2030s to meet rising demand from sectors like energy infrastructure and artificial intelligence.
Dividends and Financial Health
Shareholders are receiving a final dividend of 99 US cents per share, marking the highest payout in four years. The company’s balance sheet remains relatively stable, with net debt reduced to $8.7 billion. These shareholder returns come despite the company taking a $2.3 billion write-down on the Jansen potash project, which was an exceptional cost that weighed on the total attributable profit figure.
Operational Risks and Future Costs
Expanding production is not without difficulties. BHP faces pressure from rising costs required to maintain aging infrastructure, particularly in Chile and at the Olympic Dam site in Australia. Investors should monitor how the company manages these rising fuel, labor, and input costs, along with the execution risks involved in such large-scale capital projects. There is always a risk that if these projects face delays or if commodity prices drop, the company's profit margins could come under pressure.
The next phase for investors to track is the actual progress of these growth projects. The long-term success of the new strategy will depend on whether management can control spending while hitting their production targets in a volatile global commodity market.