Business history is full of executives imploring shareholders to give their stock an upgrade. They're often ignored. So BHP's Mike Henry took a risk in February making that pitch one of his last public statements before stepping down as CEO four months later. He argued the $232 billion diversified miner should be valued more like a pure-play copper producer. Full-year earnings on Tuesday make his view more convincing. For new boss Brandon Craig, the key to overcoming remaining investor reticence is to ensure good execution.
Jansen remains the key execution risk
That Canadian venture may be giving shareholders pause: BHP has blown past its cost and time-frame estimates three times, the latest, in June, causing a $2.3 billion earnings hit. Craig saw those problems first-hand as head of the Americas business since 2024. Demonstrating that BHP has learned from those mistakes will be key to realising Henry's full valuation vision.
BHP on August 18 reported net income for its 2026 financial year to the end of June of $9.8 billion, 9% higher than its 2025 performance. Revenue grew 15% to $58.8 billion. Underlying attributable profit, which strips out an impairment taken on its Jansen potash project and costs associated with the 2015 Samarco dam disaster in Brazil, rose 30% to $13.2 billion. The underlying EBITDA margin improved 6 percentage points to 59%.
A 99-cent-per-share dividend for the second half of the financial year took the full-year payout to $1.72 per share, the highest in four years. Net debt fell to $8.7 billion, down from $12.9 billion the previous year.
BHP shares rose as much as 3% in early trading in Sydney.
Copper is now doing more of the heavy lifting
Shareholders have partly responded to Henry's entreaties, pushing the stock up 29% by May to value the enterprise at 7.8 times expected EBITDA for the next 12 months, per data from LSEG — a level not seen in a decade. It has come off a tad since, but BHP now trades at a higher multiple than one copper-heavy specialist, Freeport-McMoRan, and not far off the 8.7 times sported by another, First Quantum Minerals. At 14.6 times, $162 billion Southern Copper remains far ahead.
Overall BHP produces a third more of the red metal — used in wiring and components for clean tech and AI data centres — than it did four years ago. It accounts for 55% of BHP's underlying EBITDA, displacing its long-standing workhorse, iron ore. It's also more profitable, with a 70% EBITDA margin compared with its portfolio-mate's still-generous 61%.
Cash generation and growth projects support the case
This has boosted the company's overall EBITDA margin to 59%, 6 percentage points higher than the previous financial year. Along with proceeds of $4.3 billion from a long-term supply deal it struck in February for the silver that's a by-product of a Peruvian copper mine, it bolstered enough cash to slash net debt by a third and pay the highest dividend in four years.
Moreover, copper is the company's biggest driver of growth: four new or expanded projects could increase production 50% by the mid-2030s. And they ought to pay for themselves: even if the copper price effectively halves, BHP reckons it can generate $15 billion in cumulative free cash flow over the next five years. Meanwhile, its Jansen potash unit could by then be cranking out $2 billion or more in EBITDA a year at a 60% margin.
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