The result also reflected a surge in coal prices as buyers including European steel mills and power plants scrambled for supply after Russia’s invasion of Ukraine upended trade flows. Some countries halted purchases of Russian coal entirely in response to the Kremlin’s aggression.

Underlying profit, a closely watched measure that strips out some one-time items, rose by 39% to $23.82 billion because of the strength in commodity prices. The miner’s metallurgical coal fetched an average price that was more than three times higher than a year earlier. BHP runs the world’s biggest export operation for metallurgical coal, used in steelmaking, in joint venture with Japan’s

Mitsubishi Corp.

Prices of other commodities sold by BHP, including copper and nickel, also rose compared with a year earlier.

Commodity prices have fallen more recently as growth slows in China, the largest buyer of many metals and minerals, and investors worry about the economic outlook in developed countries.

Chief Executive

Mike Henry

said policies introduced by China to support its economy are likely to shore up commodity demand in coming months. However, developed economies are facing a slowdown as central banks raise interest rates to tame inflation, tight labor markets persist, and geopolitical uncertainty continues to weigh.

“The direct and indirect impacts of Europe’s energy crisis are a particular point of concern,” Mr. Henry said.

That outlook mirrors recent comments by competitors including commodities giant Glencore PLC. BHP said industrywide inflationary pressures are continuing to worsen, raising mining costs and extending the timeline for bringing new projects into production.

Data released Monday showed China’s economy slowed across the board in July, including factory output, investment, consumer spending and real estate. The country’s central bank unexpectedly cut two key interest rates in an effort to shore up faltering growth.

Still, BHP expects China’s economy to improve as its 2023 fiscal year progresses, providing some tailwinds to global growth.

“We are already starting to see some areas that are improving,” including the automotive sector, Chief Financial Officer

David Lamont

said of China’s economy. A rebound in housing activity, which is being closely watched by BHP, likely needs more stimulus, he added.

In the longer run, commodity demand is underpinned by “unstoppable” trends of decarbonization and electrification, Mr. Henry said.

BHP declared a final dividend of $1.75 a share, bringing its total payout for the fiscal year to $3.25 per share. That was up 8% on the year before.

Elevated commodity prices have strengthened mining companies’ cash flow, stoking speculation that the industry could be on the cusp of a new wave of deals as they seek greater exposure to demand for materials considered to be vital to the energy transition.

BHP wants to expand its copper and nickel businesses, and earlier this month proposed a takeover of Australian copper miner

Oz Minerals Ltd.

Its proposal, which valued Oz Minerals at roughly $5.8 billion, was rejected by the company as too low.

“We have lots of levers for growth,” said Mr. Henry. “M&A is but one of those levers.”

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com