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By Rhiannon Hoyle
SYDNEY – Fortescue Metals Group Ltd. said its annual net profit more than doubled as soaring iron ore prices more than offset rising costs.
Australian company Fortescue, which reports its results in U.S. dollars, said on Monday that its net profit for the 12 months ended June 30 reached $ 10.30 billion, down from $ 4.74 billion the previous year.
Underlying profit – a measure that excludes certain one-off items – rose to $ 10.35 billion from $ 4.75 billion the year before. That was below an estimate of $ 10.41 billion compiled by Vuma from 11 analyst forecasts.
The company, the world’s No. 4 iron ore exporter, declared a final dividend of AU $ 2.11 per share ($ 1.54), bringing its annual payout to AU $ 3.58 per share. This is double the previous year.
Iron ore prices hit an all-time high in May, largely due to sizzling Chinese steel production. China’s steel production in the first half of the year increased 12% from a year earlier, while steel production elsewhere in the world also increased significantly.
Fortescue recently reported shipments of 182.2 million metric tonnes for the 12 months through June, up 2.0% from the previous year. It plans to ship between 180 million and 185 million tonnes of this product during the year until June 2022.
It ended June with a net cash balance of $ 2.7 billion, compared to net debt of $ 258 million a year ago.
However, the company is grappling with rising costs due in part to material inflation and a strong job market.
C1 costs for the full year – which do not include expenses such as royalties, shipping, and overhead – rose 8.0% to $ 13.93 per tonne. The miner forecast costs between $ 15.00 and $ 15.50 per tonne in its current fiscal year.
Iron ore prices have also fallen sharply in recent weeks, suggesting that Fortescue may benefit from less tailwind market conditions as it begins its new fiscal year. The benchmark price was $ 159 a tonne on Friday, down from over $ 220 in mid-July, according to S&P Global Platts.
Still, Fortescue said it will focus on productivity and strong operational performance to keep returns on capital for robust investors.
“We have had a good start to FY22 and through operational excellence, a sustained focus on productivity and a disciplined approach to capital allocation, we will continue to deliver benefits to all of our stakeholders. ”Said Executive Director Elizabeth Gaines.
Write to Rhiannon Hoyle at [email protected]
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