• BHP reports full-year underlying profit of $13.66 bln
• Beats analyst consensus of $13.26 bln
• Miner focuses on South Australia, Argentina copper provinces

MELBOURNE, Aug 27 (Reuters) - BHP Group (BHP.AX) , opens new tab reported a better-than-expected 2% rise in annual underlying profit on Tuesday after a strong performance at its iron ore and copper businesses and said it was comfortable with raising its debt levels to fund growth.

The world's biggest listed miner is pushing hard to expand in copper given the commodity's outsize role in the energy transition and a tougher outlook for its top revenue generator, iron ore as China's economic growth slows.

BHP walked away from a blockbuster $49 billion bid to take over Anglo American (AAL.L) , opens new tab in May that would have significantly boosted its copper business and is now turning to other options.

BHP unveiled more details around its spending and growth plans for two key copper provinces, in Argentina and in South Australia after it posted an underlying attributable profit for the year ended June 30 of $13.66 billion.

That beat a Visible Alpha consensus of $13.26 billion and was ahead of the $13.42 billion profit , opens new tab a year ago.

Andy Foster, a portfolio manager at Argo Investments, said BHP's results showed its cash flow was pretty strong and its balance sheet was in good shape.

"They have clearly laid out capex and growth expectations for copper where they are still looking at copper as a key commodity, clearly," he said. "It's just been so hard to execute large-scale acquisitions so you have to make the most of your existing assets and then look at other opportunities."

BHP said July said it would jointly take over developer Filo Corp (FIL.TO) , opens new tab for its copper growth projects near the Argentine-Chilean border, paying C$4.5 billion ($3.25 billion) with Canada's Lundin Mining (LUN.TO) , opens new tab.

UK regulations bar BHP from making another offer for Anglo until November, should it still have interest in doing so. BHP said it was keeping its balance sheet flexible.

"We are comfortable to move above our net debt target temporarily to execute value accretive opportunities in the portfolio," BHP said.

Its net debt stood at $9.1 billion as of June 30, roughly at the midpoint of its target range of $5 billion and $15 billion.

The miner said it would lift its capital and exploration spending to about $10 billion in the current 2025 financial year and an average $11 billion a year in the medium term from the 2026 financial year, up from $9.3 billion last year.

BHP's profit was underpinned by record iron ore output for a second year and resilient prices, which offset weak coal prices and the sale of two of its coal mines.

BHP declared a dividend of $0.74 per share, below the prior year's $0.80 a share, for a full-year dividend of $1.46 per share. That was its lowest full-year dividend since the 2020 financial year but still among the top four it has declared in its history.

Sign up here.

https://www.reuters.com/markets/commodities/bhps-annual-profit-rises-2-iron-ore-copper-growth-2024-08-26/