Photo by: Bloomberg
PERTH (miningweekly.com) – Iron-ore major Fortescue Metals on Tuesday reported a significant slump in after-tax net profit for the half-year ended December on the back of decreased revenue caused by a fall in the iron-ore price.
Fortescue’s realised price for the half-year nearly halved to $66/t, compared with the $124/t reported in the 2013 six-month period.
Net profit after tax decreased to $331-million during the interim period, compared with the $1.72-billion reported in the previous corresponding period, while underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) decreased from $3.22-billion to $1.44-billion.
The miner said on Tuesday that the underlying Ebitda reflected shipping at an yearly rate of 165-million tonnes, which was achieved during the first half of the year. However, improvements in operational performance, lower strip ratios, enhanced processing, and a continued focus on cost reductions were offset by the impact of lower iron-ore prices.
Revenue for the quarter declined to $4.8-billion, compared with $5.8-billion reported in the previous corresponding period, but the lower iron-ore price was offset by increased iron-ore shipments of 82.7-million tonnes during the period.
Some 86.5-million tonnes of ore were mined during the interim period, compared with the 66.9-million tonnes mined over the same period in 2013, with ore processing reaching 75.6-million tonnes.
During the interim period, Fortescue shipped 80.3-million tonnes of ore, compared with 50.8-million tonnes shipped over the same period last year.
The miner said on Tuesday that improved production and shipping volumes, lower strip ratios, enhanced processing capability, and productivity and efficiency initiatives across all of the company’s mines and ore processing facilities had continued to drive down operating costs.
It reported C1 cash costs of $30/t, compared with $33/t a year earlier.
The iron-ore major maintained its 2015 shipping guidance of between 155-million and 160-million tonnes, at a C1 cash cost of between $25/t and $26/t.