Commodities, Finance, Iron ore, News

Fortescue’s $3.9bn profit third highest in history

Fortescue

Fortescue Metals Group reported glowing profits in the first half of the 2022 financial year (FY22) as the company benefited from record iron ore shipments.

Fortescue generated a net profit after tax (NPAT) of $US2.8 billion ($3.89 billion) across the six months – the major miner’s third highest half-year profit ever.

The company set sail on 93.1 million tonnes of iron ore from 118 million tonnes mined in the half-year, a 9 per cent increase on the prior corresponding period.

Despite the significant profit, the figure was still a 32 per cent drop from the $US4.1 billion earned in the first half of the 2021 financial year (FY21), when the iron ore price climate was healthier.

Fortescue’s C1 cost of $US15.28 per wet metric tonne (wmt) in the half-year was a 20 per cent increase from the prior corresponding period.

The major miner put this down to “price escalation of key input costs, including diesel, other consumables and labour rates” along with costs related to the integration of its Eliwana iron ore and rail project in Western Australia.

Fortescue’s outgoing chief executive officer Elizabeth Gaines said the company’s continued evolution and decarbonisation remain key priorities.

“We have continued to reinvest in the business and invest in growth. Our major project, Iron Bridge, is progressing well with first production scheduled in December 2022,” she said.

“During the half, Fortescue Future Industries continued to advance a portfolio of renewable energy and green hydrogen project opportunities, while growing its green technology capabilities.

“As Fortescue continues its transition to a vertically integrated green energy and resources company, Fortescue Future Industries will be a key enabler of our industry-leading targets to decarbonise our operations by 2030 and to remove net emissions from our entire value chain by 2040.”

Fortescue recently accepted a Gold Class award as part of S&P Global’s Corporate Sustainability Assessment.

While not yet recognised in the Metals & Mining category, Fortescue was a strong candidate in the Steel sector, ranking equal highest alongside Hyundai Steel Company.

The company’s shipment targets remain on track with an expected 180 to 185 million tonnes of iron ore expected to set sail for FY22. Fortescue’s C1 cost guidance for FY22 is between $US15 and $US15.50/wmt.

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