Andrew Forrest’s Fortescue Metals Group has just posted its financial year results.
For the 12 months to June 30 attributable net profit was $US2.73 billion, up 56% year-on-year.
Company CEO Nev Power said Fortescue’s volume play, with new operations coming online and a focus on cost efficiencies has driven the profit boost.
“Fortescue’s record net profit reflects an outstanding performance across all areas of our operations. The accelerated ramp up to 155 million tonnes per annum in March and the sharp reduction in costs over FY14 are a tribute to everyone at Fortescue,” he said.
Power said Fortescue would focus on reducing its debt with another $US500 million due to be repaid in October 2014. The company’s net debt is $US7.2 billion.
“Taking repayments to $US3.6 billion in less than a year and moving us closer to our gearing target of 40 per cent,” he said.
Ramping up operations in Western Australia also saw the iron ore miner ship 124.2 million tonnes, 54% more than the previous financial year. Boosting volumes has helped cushion the company against a falling iron ore price and has decreased its C1 costs by 23% to $US34 per wet metric tonne.
This chart from Fortescue’s results shows the company’s operational margins compared to the iron ore price over the past five years.
Fortescue will pay a final FY14 dividend of $AU0.10 per share, bringing the final dividend to $AU0.20 a share.
The company is expecting to ship between 155 million and 160 million tonnes of iron ore this financial year with increased production at its Kings Valley mine coming online. Capital expenditure for FY15 is forecast at $US1.3 billion.
A short time ago Fortescue shares were trading up 0.22% at $4.630 on the ASX.
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