The performance exceeded expectations! BHP Billiton (BHP.US)'s annual profit surged 30%, and copper revenue surpassed iron ore for the first time

The Zhitong Finance App notes that as booming commodity prices boosted profits, BHP Billiton (BHP.US) profits increased by nearly one-third, and annual revenue from copper surpassed iron ore for the first time.

The world's largest mining company said that in the 12 months to June, revenue was $58.8 billion, up 15% year over year, higher than expected $57.8 billion; net profit to mother rose to $13.2 billion, up 30% year over year, breaking analysts' expectations of $12.6 billion. The company said in Tuesday's filing that it will pay a final dividend of 99 cents per share, which is equivalent to a 72% dividend ratio.

Over this 12-month period, copper prices soared to record highs; iron ore, another core product of BHP Billiton, remained strong despite slowing real estate, which dragged down steel demand.

CEO Brandon Craig said in a statement: “Reliability combined with strong pricing has contributed to a significant increase in earnings. Copper is the engine driving BHP Billiton's growth.”

For the first time, the copper business contributed more than half of the company's underlying EBITDA and generated significant free cash flow, which meant that its copper business grew self-sufficient. BHP Billiton has complete project reserves in Chile, Australia, and Argentina, and is expected to increase copper production by about 40% by FY2035.

BHP Billiton predicts that by 2050, global copper demand will increase from about 34 million tons today to 50 million tons per year. The company's strategy has been to increase investment in this key metal for electrification, which also contributed to its unsuccessful acquisition of Anglo-American Resources last year.

However, as grades decline and the mine ages, current copper production at BHP Billiton's mine in Chile is declining, prompting the company to invest billions of dollars just to maintain production.

Craig took office on July 1 and is tasked with delivering a series of major growth projects, including the expansion of the copper business portfolio in South America and Australia, and expansion into the potash business, a mineral used in chemical fertilizer.

In addition to copper and iron ore, BHP Billiton has completed 84% of the first phase of the Jensen potash project in Canada and is expected to be put into operation in mid-2027. The Jensen project is expected to be in operation for over 60 years, which will enable BHP Billiton to enter the new field of potash fertilizer, which is critical to food security.