Business Context and Reporting Period
Company: BHP Group Limited
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Half-year ended 31 December 2025 (HY26)
Filing Date: 17 February 2026
Context: BHP reported record copper EBITDA, driven by operational excellence and strong commodity prices. Copper contributed 51% of Group Underlying EBITDA for the first time since the division began reporting independently. The company announced an interim dividend of 73 US cents per share (60% payout ratio) and highlighted significant value unlocking via infrastructure and by-product agreements.
Key Financial Metrics
| Metric | Value (HY26) | Change vs Prior Period |
|---|---|---|
| Underlying EBITDA | US$15.5 billion | +25% |
| Underlying EBITDA Margin | 58% | +7 percentage points |
| Underlying Attributable Profit | US$6.2 billion | +22% |
| Net Operating Cash Flow | US$9.4 billion | +13% |
| Return on Capital Employed (ROCE) | 23.6% | +3 percentage points |
| Net Debt | US$14.7 billion | — |
| Net Debt / LTM EBITDA | 0.5x | — |
| Capital & Exploration Expenditure | US$5.3 billion | — |
| Dividends Determined | US$3.7 billion | — |
Segment Performance:
- Iron Ore: Production 134 Mt (+2%); EBITDA margin 62%.
- Copper: Production 984 kt (1,163 kt CuEq); EBITDA margin >60%.
- Steelmaking Coal: BMA production 9.2 Mt (+2%); EBITDA margin 15%.
- Energy Coal: NSWEC production 8.1 Mt (+10%).
Material Changes vs Prior Period
- Copper Dominance: Copper's contribution to Group EBITDA more than doubled since FY23, reaching 51% in HY26.
- Cost Efficiency: H1 FY26 unit costs were approximately 4.5% lower across major assets compared to H1 FY25. Specific improvements included a 16% reduction at Escondida and a 53% reduction at Copper SA.
- Production Records: Western Australian Iron Ore (WAIO) achieved record first-half production and shipments.
- Value Unlocking: US$6.3 billion in value was unlocked via the WAIO infrastructure agreement and the Antamina silver stream agreement, with a pathway to approximately US$10 billion.
- Safety: High-potential injury frequency (HPIF) decreased by 5% versus FY25 and 20% versus H2 FY25.
Guidance, Outlook, and Risks
Guidance and Outlook
- Copper Production: FY26 guidance increased to 1,900–2,000 kt (attributable). Medium-term pathway targets ~2.5 Mtpa CuEq by FY35.
- Escondida: FY26 guidance increased by 50 kt; FY27 guidance increased by 100 kt. New concentrator project on track for first production FY32.
- Iron Ore: FY26 production guidance 258–269 Mt. Unit cost guidance remains below US$17.50/t.
- Capital Allocation: Medium-term group capex guidance is US$10 billion per annum, with ~40% allocated to growth projects.
- Dividends: Maintained 50% minimum payout policy; interim dividend set at 60% payout ratio.
Management Commentary
Management emphasized a strategy of "Stability + Growth = Value," leveraging sector-leading margins and a strong balance sheet to fund growth and returns. The company highlighted its ability to increase copper production guidance while competitors decreased theirs, citing operational excellence and cost declines.
Risks and Contingencies
- Project Execution: Jansen Stage 1 project cost increased to US$8.4 billion (from US$5.7 billion at sanction). First production expected mid-CY27.
- Legal (Samarco): BHP intends to appeal the English High Court's decision finding BHP liable under Brazilian law regarding the 2015 dam failure. A second stage trial is scheduled for April 2027 to March 2028. A provision of US$5.3 billion was recorded at HY26.
- Forward-Looking Statements: Risks include commodity price volatility, geopolitical factors, regulatory changes, and climate variability.
Investor Verification Checklist
- Verify Jansen Cost Overruns: Confirm the rationale and impact of the US$2.7 billion increase in Jansen Stage 1 capital costs on future cash flows and IRR.
- Review Samarco Provisions: Assess the adequacy of the US$5.3 billion provision against potential outcomes of the UK group action appeal and ongoing Brazil Agreement obligations.
- Validate Copper Guidance: Cross-check the increased FY26 and FY27 copper production guidance against operational constraints and grade decline assumptions at Escondida.
- Confirm Value Unlocking: Verify the regulatory approval status and closing conditions for the WAIO power network sale and Antamina silver stream to ensure the US$6.3 billion proceeds are realized.
- Monitor Safety Metrics: Track the trajectory of High-potential injury frequency (HPIF) to ensure the reported 20% reduction in H2 FY25 is sustained.