BHP is experiencing a record-breaking day on the market, with shares climbing by over 5 per cent after its first-half profit surged 28 per cent to $US5.64 billion. The boost was primarily driven by robust copper earnings and margins. Shares in BHP reached a record high of $54.20 on Tuesday, marking a 5.4 per cent increase. The company’s market capitalisation has expanded by almost $16 billion. BHP is a leading global resources company, extracting and processing minerals, oil, and gas from its production operations, primarily in Australia and the Americas. The company aims to create long-term shareholder value through the development of natural resources.
Group EBITDA for the December half reached $US15.5 billion, with copper contributing $US8 billion. For the first time, copper has overtaken iron ore as the largest earnings driver for the company. This shift signals a move away from the company’s traditional reliance on iron ore, highlighting its focus on commodities crucial for electrification and decarbonisation efforts.
Betashares senior investment strategist Cameron Gleeson noted that the market’s positive reaction reflected copper’s growing strategic importance. Gleeson stated that the strength in copper production and upgraded forward guidance stood out, especially as competitors have lowered expected supply through to 2027. He added that BHP management has clearly stated its ambition to gain market share in what it sees as a fundamentally tight copper market.
In addition to strong earnings, BHP announced a $US4.3 billion silver streaming deal with Wheaton Precious Metals. Milford portfolio manager Greg Cassidy commented that BHP has been focusing on the quality of its assets across various commodities, with the Antamina deal being a successful move. Cassidy further speculated on potential future strategic moves by the company, stating that the market may give little attention to value adding opportunities.
