Fortescue profit up 260% in second half of 2013
Fortescue Metals, the world's fourth largest iron ore producer, is reporting a 260% jump in net profit for the second half of 2013, with earnings per share of 55 US cents, compared with 15 cents in the second half of 2012.
As a result, the Australian company announced an interim dividend of 10 Australian cents per share – last year the company didn't offer this payout.
Fortescue's biggest shareholder, Chairman Andrew Forrest, will get $103 million from this transaction, according to the Sydney Morning Herald.
“This record result underlines the continued success of Fortescue’s strategy to rapidly construct new capacity, ramp up production and drive down costs," CEO Nev Power said in a statement. "The ongoing strong demand for our products has allowed us to accelerate debt repayment, de-risk the balance sheet and increase returns to our shareholders.”
Net profit after income tax in the last six months of the year was US$1.7 billion, compared with US$478 million during the same period the year prior. The results are due to expanded operational capacity of mining, rail, and port operations, stronger iron ore prices and cost reductions.
The quantity of ore mined in the second half of the year jumped 91% while ore shipment levels increased by half to 53.9 million tonnes.
The company also commenced an accelerated debt reduction program thereby reducing its net debt position from $10.5 billion in June 2013 to $8.6 billion by the end of the year.
Fortescue and other major iron ore miners are posting significant production boosts for the past year. BHP Billiton, Rio Tinto and Vale have all announced record iron ore production lately.
Iron ore prices have been climbing away from the crucial $120 mark, with the benchmark price hitting $124 on Monday.
With operations in Australia's Pilbara region, Foretescue is geographically well-positioned to supply the world's biggest consumer of the seaborne iron ore trade, China.