Fortescue profit is down 81% to $331 million

Andrew Forest at the recent opening of one of Fortescue’s iron ore projects in WA. Image: Supplied.

Fortescue has just released its interim results and it’s just above analyst expectations with net profit down 81% to $331 million.

Here are the numbers.

The miner announced an interim dividend for the first half of $0.03 a share compared to $0.10 a share last half. A $0.03 dividend gives Twiggy Forrest a $3.1 million pay day, according to his holdings published in the last annual report.

While the result was better than analyst expectations of $329 million it was still a huge drop from last year’s result.

UBS was expecting first half net profit to come in at $US361 million, down from the $1.7 billion recorded in the previous period. The bank said the impact of a lower iron ore price, which averaged $US75 a tonne over the period, would be felt in these results.

But the miner has offset part of the fall by ramping up shipment volumes by more than 50% to over 82 million tonnes. Increased shipping volumes lifted operating revenues but were offset by lower commodity prices.

During the period Fortescue realised $US66 a tonne compared to $US124 a tonne in 2013 based on the 62% Platts index.

Fortescue continued to pay down its debt, making $US500 million in repayments during the first half. The repayment took its net debt position to $US9.1 billion as of December 31.

Capital expenditure for the first half fell to $US436 million compared to the $1.352 billion clocked in the first half last financial year. The fall is a result of deferred expansion projects and reducing costs.

The pure play iron ore miner is heavily exposed to fluctuations in the commodity price as well as any movements in the Chinese economy.

The company still sees China as a strong market and expects GDP growth to stick around the 7% mark this year.

Fortescue maintained its full-year production guidance of between 155 million tonnes and 160 million tonnes.

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