Fortescue on Wednesday reported a material uplift in first-half earnings, driven by its highest-ever iron ore shipments and an increase in realized prices for the steelmaking raw material.
The company said underlying net profit after tax attributable for the six months ended December 31 was $1.91 billion. That outcome represented a 23% rise in profit versus the prior comparable period. The result, however, missed the Visible Alpha consensus estimate of $1.98 billion and was reported as below the $1.55 billion profit it posted a year earlier.
Shipments and pricing
Fortescue recorded iron ore shipments of 100.2 million metric tons in the first half, a year-on-year increase of more than 3% and the highest first-half volume in the company's history. The miner said it sold iron ore for about $90.87 per dry metric ton (dmt) on average for the period, up from $85.24 per dmt in the prior year.
Commercial relationships and market context
The company has deepened commercial ties with buyers in China at a time when major iron ore suppliers are engaged in negotiations with state-backed buyer China Minerals Resources Group. Fortescue said these developments come as China Minerals Resources Group has restricted shipments from larger rival BHP.
Capital returns
Fortescue declared a final dividend of 62 Australian cents per share for the half, an increase from the 50 Australian cents per share it paid a year earlier.
Outlook considerations
The company’s half-year performance was supported by both volume growth and higher realised pricing, while its strengthened ties with Chinese buyers occurred against a backdrop of restricted shipments for some competitors. The reported underlying profit compared with published analyst expectations and the company’s prior-year profit figure, as stated above.