Andrew Forrest will receive more than $2.3 billion in Fortescue dividends after the iron ore giant posted its second-highest profit in the 2021–22 financial year (FY22).
The huge pay packet for the Fortescue chair and majority shareholder comes as the major miner’s shareholders pocketed a fully franked final dividend of $1.21 per share, amounting to a total FY22 dividend of $2.07 per share.
Considering Fortescue’s FY22 net profit after tax (NPAT) of $US6.2 billion ($9 billion), the company has achieved an NPAT payout ratio of 75 per cent, which falls in the upper end of its 50–80 per cent goal.
While the $9 billion profit was Fortescue’s second-highest earnings result ever, it was down 40 per cent from the company’s $US10.3 billion ($15 billion) NPAT in FY21.
This reduction wasn’t due to an operational decline, however, given Fortescue shipped a record 189 million tonnes of iron ore in FY22, rather prices and price realisation weakened across the 12 months.
Fortescue achieved average revenue of $US100/dry metric tonne (dmt) in FY22, representing a 72 per cent realisation of the Platts 62 CFR Index. In FY21, Fortescue achieved average revenue of $US135/dmt with an 88 per cent price realisation.
The price for 62 per cent seaborne Australian iron ore fines at the port of Qingdao were trading just above $US105/dmt at close on August 26.
Fortescue wasn’t immune to inflation either, with its C1 cost (direct production cost) rising 14 per cent from $US13.93/wet metric tonne (wmt) to $US15.91/wmt, with higher prices for diesel and labour the key drivers.
Fortescue chief executive officer Elizabeth Gaines said FY22 was another successful year for the company, highlighted not just by its profits but also its continued growth.
“Fortescue celebrated a number of significant milestones in FY22, including $4 billion in contracts and sub-contracts awarded to Aboriginal businesses since our Billion Opportunities program was launched in 2011,” she said.
“We have also progressed our journey to decarbonisation with the energisation of the 60MW (megawatt) Chichester solar gas hybrid project which is providing stationary energy for our Christmas Creek and Cloudbreak sites and displaced 78 million litres of diesel usage in FY22.
“The execution of our decarbonisation strategy was further enhanced through Fortescue’s acquisition of Williams Advanced Engineering and the strategic partnership with Tier 1 global heavy equipment manufacturer Liebherr for the development and supply of zero-emission green mining haul trucks.”