Fortescue Annual Net Profit Rises 18% — Update

By Rhiannon Hoyle

Fortescue, the world's fourth-largest iron ore producer, reported an 18% rise in annual net profit helped by an increase in the price it got for sales of the steelmaking commodity.

Australia-based Fortescue on Wednesday said it made a net profit of US$5.68 billion for the year through June. That compared to a US$4.80 billion profit a year earlier when its bottom line was weighed by a large writedown against its Iron Bridge project.

The company said its underlying profit was 3% higher year over year, while underlying earnings before interest, taxes, depreciation and amortization rose by 7%.

Fortescue, which makes its money running iron-ore pits in remote northwest Australia, benefited from higher prices for the commodity it mostly sells to Chinese steel mills. The company said the average realized price for its Pilbara hematite was US$103 a metric ton versus about US$95 a ton the year earlier.

Directors declared a final dividend of 89 Australian cents (US$0.60) a share, taking its total dividends for fiscal 2024 to A$1.97 per share. That compares to A$1.75 a share a year earlier and represents a payout of 70% of underlying profits. Fortescue has a policy to spend between 50% and 80% of annual underlying profit on dividends.

Fortescue's iron-ore shipments were broadly flat year over year as it grappled with setbacks including a train derailment and heavy rain. The miner shipped 191.6 million tons of the steel ingredient in the 12 months through June, compared to 192.0 million tons in the year before.

It also continued to face inflation pressures including on diesel prices and labor rates, it said.

Fortescue reported total capital expenditure of roughly US$2.9 billion, including US$317 million for its energy arm. The miner has in recent years sought to rapidly build a clean-energy business focused on green hydrogen, pursuing projects in countries including the U.S. and Australia.

The company last month said it will make about 700 employees redundant as part of a restructuring aimed at removing duplication in its mining and energy arms, and reducing costs.

Fortescue Energy chief Mark Hutchinson on Wednesday said the company remains committed to the green energy transition and is "making solid progress" toward its goals, but also needs to be focused and maintain fiscal discipline.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

August 27, 2024 19:36 ET (23:36 GMT)

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