FMG's core earnings in H2 spike on expansion, lower costs

Australia’s Fortescue Metals Group (FMG) reported a surge in its core earnings for the half year ended December 31 on capacity expansion and lower costs.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

Earnings before interest, taxes, depreciation and amortisation reached $3.22 billion during the period, compared with $1.13 billion a year earlier, the iron ore miner said in its latest results statement on Wednesday February 19.

Total shipments saw a 51% year-on-year jump to 53.9 million wet tonnes and realised prices averaged $124 per tonne cfr, up 18% from year-earlier levels, FMG said.

Revenue totalled $5.87 billion, up 77% on an annual basis, the miner said.

Cash costs dropped by 34% year-on-year to $33 per wet tonne of iron ore during the period. This was attributed to cost improvement initiatives and a lower Australian dollar.

FMG commissioned its 40-million-tpy Kings Mine in November 2013. The miner expects to ramp up to its overall production to a targeted rate of 155 million tpy by the end of March 2014.

Its net debt position as at December 31 was $8.6 billion, down from $10.5 billion six months earlier. The company said it has “significant flexibility to make voluntary repayments of debt or refinance prior to maturity”.

The miner expects to ship a total of 127 million tonnes of iron ore during the fiscal year 2014 ending June 30, subject to weather conditions and the ramp-up of Kings Mine ore processing facilities to full production capacity.

FMG’s forecast capital expenditure for the fiscal year 2014 is $2.1 billion, down from $6.2 billion in the previous year.

Recent Base Metals News

Editor's pick