BHP FY2026 results: copper powers earnings and a four-year-high dividend

BHP delivered a strong set of FY2026 numbers, with higher commodity prices, dependable operations and cost control combining to lift earnings and cash generation.

The most important change is happening within the portfolio. Copper generated more than half of group underlying EBITDA for the first time, reducing iron ore's dominance and showing why management describes copper as BHP's growth engine.

There is plenty here for shareholders to like, including lower debt and the largest final dividend in four years. However, investors also need to weigh lower copper production guidance, rising project expenditure and a US$2.3 billion impairment against the Jansen potash development.

Before examining the financials, the announcement's opening message should not be overlooked. BHP reported that a contracting colleague was fatally injured at BMA's Peak Downs mine in July 2026. Investigations remain underway, and management said eliminating fatalities remains its highest priority.

BHP's FY2026 results at a glance

Metric	FY2026	Change from FY2025
Revenue	US$58.8 billion	Up 15%
Attributable profit	US$9.8 billion	Up 9%
Underlying attributable profit	US$13.2 billion	Up 30%
Underlying EBITDA	US$32.9 billion	Up 27%
Underlying EBITDA margin	59%	Up from 53%
Net operating cash flow	US$21.8 billion	Up 17%
Free cash flow	US$9.8 billion	Up 83%
Net debt	US$8.7 billion	Down from US$12.9 billion
Final dividend	99 US cents per share	72% payout ratio

Underlying EBITDA means earnings before interest, tax, depreciation and amortisation, adjusted to remove certain exceptional items. It is useful for comparing operational performance, although it is not the same as statutory profit or cash flow.

Readers can view the original company announcement or visit the BHP Group Limited share page for company information.

Copper has become BHP's main earnings driver

Copper underlying EBITDA rose 48% to a record US$18.2 billion, accounting for 54% of the group's total. The division achieved a 70% underlying EBITDA margin and generated US$6.9 billion of free cash flow.

The result benefited significantly from pricing. BHP's average realised copper price rose 35% to US$5.74 per pound. Copper production declined 3% to 1,953 thousand tonnes, meaning the earnings uplift was not simply the product of producing more metal.

Escondida remained the standout asset, generating US$12.4 billion of underlying EBITDA, up 45%. Its unit costs fell 10% to US$1.07 per pound despite lower production caused by planned grade decline.

Copper South Australia also performed strongly. Production increased 2% to 321 thousand tonnes, while underlying EBITDA jumped 65% to US$3.2 billion. Unit costs fell 73% to US$0.32 per pound, helped by gold, silver and uranium by-product credits.

This matters because BHP plans to increase attributable copper production by around 40% by FY2035. Its pipeline includes Escondida, Copper South Australia, Vicuña and Resolution Copper, alongside smaller development opportunities.

BHP has approved around US$0.5 billion of pre-commitment funding for Escondida's proposed new concentrator. A final investment decision is expected in calendar years 2027 to 2028, with potential first production in 2031 to 2032.

There is an immediate caveat. Group copper production guidance for FY2027 is between 1,650 and 1,800 thousand tonnes, below FY2026's 1,953 thousand tonnes. Escondida's planned grade decline is a significant factor, with its FY2027 production expected to fall to between 1,000 and 1,100 thousand tonnes.

Iron ore remains BHP's cash-generating backbone

Iron ore may have surrendered the top earnings spot, but it still delivered US$14.5 billion of underlying EBITDA and a 61% margin.

Western Australia Iron Ore achieved record production and shipments on a 100% basis. BHP's share of production was unchanged at 257 million tonnes, while underlying EBITDA increased 2% to US$14.7 billion.

Unit costs rose 6% to US$19.66 per tonne, reflecting a stronger Australian dollar and higher diesel costs. FY2027 unit cost guidance rises further to US$20.25 to US$21.75 per tonne, subject to diesel price movements.

Management intends to sustain WAIO production above 305 million tonnes per year on a 100% basis from the fourth quarter of FY2028. The newly approved Ministers North mine is expected to contribute around 20 million tonnes annually once ramped up.

The attraction is straightforward: WAIO remains a large, low-cost operation capable of producing substantial cash. The risk is that iron ore earnings remain sensitive to Chinese steel demand, commodity prices, fuel costs and foreign exchange movements.

Strong cash flow has reduced balance-sheet pressure

Net operating cash flow rose 17% to US$21.8 billion, while free cash flow increased 83% to US$9.8 billion after capital and exploration expenditure of US$10.3 billion.

Net debt fell from US$12.9 billion to US$8.7 billion, leaving it below BHP's unchanged target range of US$10 billion to US$20 billion. Gearing declined from 19.8% to 13.4%, and net debt stood at just 0.3 times underlying EBITDA.

The improvement was supported by US$4.3 billion of proceeds from the Antamina silver streaming transaction and US$0.8 billion from asset sales. BHP also received US$2.0 billion from Global Infrastructure Partners in August 2026 under a WAIO power-related partnership.

These transactions helped release capital, but they are not recurring operating earnings. Investors should therefore separate the cash generated by mining operations from proceeds created through portfolio management.

The dividend reaches its highest level in four years

BHP declared a fully franked final dividend of 99 US cents per share, worth US$5.0 billion and representing a 72% payout ratio. Fully franked means the dividend carries Australian corporate tax credits, although the treatment for individual shareholders depends on their circumstances.

The dividend takes total FY2026 cash returns to US$8.7 billion, or US$1.72 per share, the highest in four years. Payment is scheduled for 23 September 2026, with the London Stock Exchange ex-dividend date set for 3 September.

The increased distribution is supported by genuine improvements in earnings, cash flow and leverage. Even so, BHP's dividend remains linked to profits and its Capital Allocation Framework, so it should not be viewed as fixed.

Jansen is the main blot on the results

BHP's Jansen potash project offers long-term diversification, but its rising cost is a clear concern.

Stage 1 was 84% complete at year-end and remains on track for first production in mid-2027. Its estimated expenditure is US$8.4 billion.

Stage 2 was 16% complete, with first production expected in late FY2031. The investment estimate has increased from US$4.9 billion to US$6.9 billion, contributing to a US$2.3 billion impairment charge.

Capital and exploration expenditure is expected to reach around US$11 billion in FY2027, FY2028 and, on average, each year from FY2029 to FY2031. BHP has the balance sheet to fund this programme, but cost execution will be central to whether these projects generate attractive shareholder returns.

What BHP shareholders should watch next

BHP exits FY2026 with stronger earnings, more free cash flow and less debt. Copper's rise to 54% of group underlying EBITDA also gives the business a clearer growth story beyond its established iron ore operations.

The next test is delivery. Investors should monitor FY2027 copper volumes, Escondida's costs, WAIO's diesel exposure, Jansen spending and the progress of major copper investment decisions.

The financial position provides room to invest while returning cash to shareholders. Whether BHP can preserve that balance as capital expenditure rises will be the key question following an otherwise strong year.