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.
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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.