Fortescue doubles profits in 2017

PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has doubled its net profit for the year ended June 30, reflecting the higher iron-ore prices during the year, as well as a sustained focus on productivity and efficiency initiatives that resulted in record low C1 cash costs.

Net profit after tax was reported at $2.1-billion, compared with the $985-million reported in the 2016 financial year, with revenue increasing by 19% to $8.4-billion, compared with the $7.1-billion reported in 2016.

Underlying earnings before interest, taxes, depreciation and amortisation increased by 48% during the 2017 financial year, to $4.7-billion, while C1 cash costs reduced to $12.82/t, and C1 operating costs reduced by 17% to $12.16/t.

“The whole Fortescue team has delivered these outstanding results against our key stretch targets of safety, production and costs,” said CEO Nev Power on Monday.

“Fortescue has continued to generate excellent cash flows allowing further repayment of debt, strengthening of our balance sheet and increasing returns to our shareholders.”

Cash on hand at the end of June was reported as $1.8-billion, with Fortescue reducing its net debt to $2.6-billion, from the $5.1-billion reported at the end of the last financial year.

Looking ahead, the miner expected to produce some 170-million tonnes of ore in 2018, with C1 costs estimated to reach between $11/t and $12/t, subject to the fluctuations in the Australian dollar exchange rate and fuel prices.