As widely forecast Australia’s third iron ore exporter Fortescue will pay a $A1 final dividend (fully franked) after a year of bumper demand from Chinese steel mills and 6 year plus highs for global iron ore prices that sent earnings soaring to record levels.
The iron ore miner reported a 49 percent increase in post-tax profit to $US4.7 billion ($6.6 billion), or $US1.54 ($2.29) per share, from revenue of $US12.8 billion ($17.8 billion).
The result was in line with analyst expectations.
FMG shares reacted accordingly, rising 3.1% to $18.56 by the close on Monday.
Total dividend for the year is up 50% to $A1.74 a share, which means a record $A2 billion payout for the company’s largest shareholder and chairman, Andrew Forrest.
As it forecast in its production report last month for the 2019-20 year, Fortescue expects to ship up to 180 million tonnes over the next 12 months. up slightly from the record 178 million tonnes shipped in the year to June.
It also confirmed the production costs and price data in the production and sales report – production costs lowered from $US13.11 ($A18.28) per wet metric tonne in 2018-19 to $US12.94 ($A18.04), while the realised price jumped from $US65.06 ($A90.73) to $US78.62 ($A109.64).
Prices at the moment are running well ahead of that level at more than $US120 a tonne for 62% Fe ore delivered to northern China.
The company has $US4.9 billion in cash, little debt (net debt was $US258 million) and expects to invest up to $US3.4 billion ($4.7 billion) on capital expenditures.
Fortescue CEO Elizabeth Gaines said the miner achieved records across all key operating and financial measures.
“Delivering enhanced returns to our shareholders remains a key priority, and for FY20 we have declared $US3.7 billion ($A5.16 billion) in dividends, representing a payout ratio of 77 percent of full-year NPAT,” Ms. Gaines said.
“We are proud to have achieved the number one ranking in the S&P/ASX100 Index for total shareholder returns over the three years to 30 June 2020 of 266 percent.”
