Logistics, Ports & Terminals, Mining and Heavy Industries

FMG soars to $2bn profit

FMG railway - photo FMG

Fortescue Metals Group exported 170.4 million tonnes of iron ore through its Pilbara port and rail network in FY17, on its way to a doubling in annual profits to $2.1 billion.

The Australian-grown iron ore operator announced its FY17 results on Monday, saying net profit had gone up 112% from a year ago.

The miner credited cost cutting and a stronger iron ore price for the solid result, and handed out a $0.25 per share fully-franked dividend.

“Fortescue has continued to generate excellent cashflows allowing further repayment of debt, strengthening of our balance sheet and increasing returns to our shareholders,” chief executive officer Nev Power said.

“Consistent production was sustained in FY17 with delivery of 170.4 million tonnes from our mining operations at the Chichester and Solomon Hubs through our world class port and rail infrastructure.”

Fortescue exports its iron ore from Port Hedland.

“Responsiveness to our customers’ needs has driven refinements to our product strategy, meeting the core requirements of quality, timely delivery and flexibility,” Power continued.

Fortescue cut its C1 operating cost to US$12.16 per wet metric tonne in the June quarter, and Power says the miner can continue to cut that cost below US$12.

“Cost performance has been a core element of Fortescue’s success in FY17,” he said.

“With our sustained productivity and efficiency focus, costs have reduced a further 17% compared to FY16. From November 2016, Fortescue’s position as the lowest cost provider of seaborne iron ore to China has been recognised and maintained by Metalycs Resource Sector Economic analysis.

“Guidance for our C1 cost of US$11-12 will ensure that our cost reduction momentum journey is sustained, as we optimise technology and innovation across all areas of the business.”

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