Shares of BHP Group Ltd. surged to an all-time high during Tuesday's trading session, ultimately closing 4.9% higher at A$52.84 on the Australian Securities Exchange. The stock reached an intraday peak of A$54.20, trading within a range of A$52.73 to A$54.20 before settling at the record close. This substantial gain was propelled by investor enthusiasm for the company's larger-than-expected interim dividend and a profit performance led by its copper division.
Copper Takes Center Stage in Earnings Mix
The financial results highlighted a pivotal moment for the global miner. Underlying EBITDA, a key measure of operational profitability, rose by 25% to US$15.5 billion. Underlying attributable profit climbed to US$6.2 billion. Notably, copper contributed 51% of the group's underlying EBITDA, officially surpassing iron ore as the primary earnings driver. Copper operating earnings reached US$7.95 billion, edging out iron ore earnings of US$7.50 billion. This shift was supported by a 32% jump in realized copper prices, while iron ore unit costs increased by 7% to US$19.41 per tonne.
Dividend Announcement Exceeds Expectations
BHP declared an interim dividend of 73 U.S. cents per share, representing a 60% payout ratio. Portfolio managers noted the dividend "surprised to the upside," with one stating the company "smashed everyone's expectations from a dividend perspective." Chief Executive Officer Mike Henry characterized the period as "a milestone" for the group, emphasizing the growing significance of copper to its portfolio.
Strategic Pivot and Market Context
The rally is significant as it reflects BHP's intensified strategic focus on copper, a metal crucial for electrification, grid infrastructure, and data centers. This shift occurs concurrently with market concerns over softer iron ore prices, which recently hit a seven-month low, and rising operational costs. For the Australian equity market, BHP's substantial move served as a reminder of the index's heavy reliance on a few major mining and banking constituents, with the stock's rise providing considerable support to the broader market.
Looking forward, BHP-backed Vicuña has outlined an ambitious US$18 billion multi-year investment plan for copper, gold, and silver projects in Argentina. An initial US$7 billion is earmarked for the Josemaria and Filo del Sol projects, with capital deployment scheduled to begin from 2027 ahead of a production target of 2030.
Risks and Sector Implications
While the news is positive, analysts caution that the momentum could fade if copper prices cool or if iron ore continues its downward trajectory alongside persistent cost inflation. Major project expenditures also pose a risk during an economic downturn, even for a company with a strong balance sheet like BHP. The performance of peers such as Rio Tinto and Glencore, which also have significant copper exposure, tends to correlate with sharp movements in the metal's price.
Key Dates and Trader Focus
Attention now turns to the dividend timetable. BHP has set an ex-dividend date of March 5 for shares traded on the ASX and LSE, and March 6 for the NYSE. The payment is scheduled for March 26. The ex-dividend date is the first day the stock trades without the right to receive the declared dividend.
As trading resumes, market participants will monitor whether BHP can sustain its gains following the post-earnings rally. Traders will also watch copper and iron ore price movements to see if they support the company's new earnings composition leading into the March ex-dividend date.
