Photo by: Bloomberg
PERTH (miningweekly.com) – Iron-ore major Fortescue Metals has reported a 56% increase in profit for the year ended June, as revenue surged on the back of increased production.
Fortescue reported a record net profit of $2.73-billion, up from the $1.7-billion reported in the previous financial year. Revenue for the financial year was also up by 45%, from $8.12-billion reported in 2013 to $11.75-billion.
The increased revenue was achieved as a result of record operational performances, with Fortescue shipping some 124.2-million tonnes of ore during the 12 months, a 54% increase on the previous financial year.
“Fortescue’s record net profit reflects an outstanding performance across all areas of our operation,” said CEO Nev Power on Wednesday.
“The accelerated ramp-up to 155-million tonnes a year in March and the sharp reduction in costs over 2014 are a tribute to everyone at Fortescue.”
Earnings before interest, tax, depreciation and amortisation increased by 58% year-on-year to $3.5-billion.
C1 cash costs decreased by 23% to $34/t, on the back of increased production from the lower-cost Firetail and Kings mines, the blending of low impurity Chichester and higher-grade Firetail ore to lower strip ratio’s at the Chichester Hub, enhanced processing capability, and a lower Australian dollar.
For the 2015 financial year, Fortescue expected to ship between 155-million and 160-million tonnes, at a C1 cash cost of between $31/t and $32/t. The expected reduction in the C1 cost reflected a full year of production from the Kings Valley mine, improved processing capability, operational efficiencies and innovations, the miner said.
The company was also expected to spend about $1.3-billion in capital expenditure during the next financial year.
“We remain steadfast in our commitment to debt reduction, with another $500-million to be repaid in October, taking repayments to $3.6-billion in less than a year and moving us closer to our gearing target of 40%,” Power said.