REPORTING SEASON: Fortescue Metals Group Ltd (FMG)

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Figure 1: Fortescue Metals Group Ltd 12 month chart

 

Fortescue narrowly misses estimates with full year profit.

·         Fortescue Metals Group has reported a full year NPAT of US$2.7Billion, an increase of 57%. The result was slightly below expectations, with analysts on average expecting a figure of $2.782Billion. A feature of the result was the doubling of cash flow over the last 12 months to US$6.2Billion, reflecting record levels of production. 124.2 Million Tonnes of iron ore were shipped in the period representing an increase of 54% on the previous year.

·         FMG’s average realised price for ore was US$106 per tonne. A combination of increased global production in the face of moderating Chinese demand saw prices fall from an average price of US$114 per tonne a year earlier.

·         The miner has repaid US$3.1Billion of debt in the previous 12 months. FMG intends to repay another US$500Million in relation to senior notes in October. The strength of the iron ore price in the near term will determine how much debt will be paid down in the year ahead with a figure in the range of US$500Million to US$1Billion being targeted.

·         The miner declared an A$0.10 per share final fully franked dividend, bringing the full year payment to A$0.20 per share. The record date of the final dividend is 3 September 2014. The payment date of final dividend is 3 October 2014.

 

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Tom Piotrowski, Market Analyst,