Australia’s third iron ore major Fortescue Metals Group saw a 40% fall in its June 30 profit and a 43% slicing of its final dividend as iron-ore prices weakened and operating costs rose.
Fortescue said it made a net profit of $US6.20 billion in the year to June, down from the record $US10.30 billion a year earlier.
Underlying earnings before interest, tax, depreciation and amortisation fell by 36% to $US10.56 billion.
Revenue fell 22% to $US17.4 billion, still the second highest in the company’s history, as were earnings.
Directors declared a final dividend of $A1.21 a share, sharply down from the $A2.11 final for 2020-21. This takes the miner’s total dividend for 2022 to $A2.07 a share, at the upper end of the company’s payout range.
The 43% cut in the size of the final meant the total was 42% down on the $A3.58 paid for the previous financial year.
The shares were down almost 5% at $18.89 at the close on Monday.
“We have experienced a strong start to FY23 and through operational excellence, a sustained focus on productivity and a disciplined approach to capital allocation, we will continue to deliver benefits to all our stakeholders,” CEO Elizabeth Gaines said in Monday’s statement.
Fortescue confirmed its previous July announcement that it shipped a record 189 million tonnes for the June, 2022 financial year.
The miner said it made an average $US100 a ton, or 72% of the industry’s benchmark price, in fiscal 2022.
That 16 percentage point difference compared to $US135 a ton, or 88% of the benchmark a year earlier explains the slump in revenues and earnings for the year on top of the fall in market prices and higher costs.
Fortescue also reported a 14% increase in output costs, mostly because of higher prices for labour, diesel and other consumables.
Still, Fortescue chairman and major shareholder Andrew Forrest won’t be too disappointed as he will take home $A2.34 billion in dividends for the June year.
Fortescue had $US5.2 billion in cash on hand at June 30, so its other activities and investments across a wide range of renewables (especially hydrogen) will have plenty of money to finance progress in the coming year.
