BHP soars to new highs after a strong result
BHP delivered a solid result, with headline profit in line with expectations, as BHP continues to demonstrate operational resilience with improving momentum in copper.
- Revenue US$27.9bn vs US$26.88bn estimate
- Underlying profit US$6.20bn v US$6.25bn estimate
- Dividend 73c vs 65.3cestimate
Operationally, iron ore and copper production were up a modest ~2% YoY, though the earnings picture is what really jumped out with copper now contributing 51% of 1H FY26 group EBITDA. FY26 copper guidance was increased at Escondida and Antamina and reaffirmed at Spence.
The “Big Australian” also revealed on Tuesday that its Vicuna project in Argentina would cost $US7 billion to build but could be one of the world’s top five copper producers by volume. The mine is a partnership with Canadian company Lundin Mining, and in documents published on Tuesday morning, the partners said the cost of mining copper at Vicuna could be covered by the gold and silver that comes out of the mine, meaning the copper would effectively come for free!
BHP also announced a long-term silver streaming agreement with Wheaton Precious Metals, receiving US$4.3bn upfront tied to its share of silver production at Antamina in Peru as well as a 20% trail on silver delivered moving forward. The deal monetises silver as a byproduct while retaining full exposure to the core copper-zinc asset and is not expected to increase reported debt.
BHP delivered a lift in the dividend, underscoring the resilience of the balance sheet and confidence in future cash flows. Near-term sentiment may take a hit given iron ore weakness; however, the business continues to execute strongly at its copper projects at just the right time.
- We own BHP in our Active Growth Portfolio and Active Income Portfolio.
