Fortescue profits surge on higher iron-ore prices

PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has more than tripled its net profit for the half-year ending December 31, as revenue and underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) increased.

Net profits increased by 283% from the $319-million reported at the end of December 2015, to $1.2-billion.

Revenue for the period was up 34%, from $3.3-billion to $4.4-billion, while underlying Ebitda was up 103%, from $1.3-billion to $2.6-billion. The higher revenue reflected the 27% increase in the average iron-ore price achieved during the period under review.

“Our team has continued their unwavering focus on delivery against safety, productivity and cost reduction targets. We achieved further improvements in our C1 cash costs to $13.06/t, and shipped 86.1-million tonnes for the half-year, slightly ahead of our targets,” said CEO Nev Power on Wednesday.

“Our successful operational performance combined with positive market conditions produced strong cash flows facilitating further debt repayments of $1.7-billion. With ongoing improvements in productivity and efficiency driving consistent cash returns from our world-class assets, the board has declared a 20c a share fully franked interim dividend,” said Power.

Fortescue has maintained its iron-ore shipment targets of between 165-million and 170-million tonnes for the full year, with C1 cash costs expected to reach between $12/t and $13/t in the full year.