Fortescue shares edge higher after profit lift
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More news: Shares in Fortescue Metals Group were up 0.6% at $18.75 after Australia's third biggest iron ore exporter posted an 18% increase in full-year profit.
RBC Capital Markets analysts said Fortescue's result had no surprises with a strong dividend. It has an 'underperform' rating on the stock with a price target of $20 a share.
What they said: "Given prior disclosure, today's focus was the dividend and composition of the cashflow statement. FMG declared an 89 cents per share final dividend, representing a 70% full year payout-ratio, which was in line with consensus," RBC analyst Kaan Peker said in a note.
"On the composition of the cashflow statement, capex was in line and minor difference in working capital and cash tax)."
Fortescue lifts full-year profit but misses estimates
The news: Fortescue Metals Group has lifted full-year profit on the back of higher prices and sales for its iron ore, but lagged market estimates.
The numbers: Net profit for the year to 30 June, 2024, was up 18% to USD5.68 billion ($8.4 billion), lower than analyst estimates of $6.11 billion.
Underlying earnings were up 7% to USD10.7 billion while revenue rose 8% to USD18.22 billion on the back of higher prices.
The company will pay a final dividend of $0.89 a share, down from $1 a year ago, although the total dividend is higher at $1.97 a share.
The context: Australia’s third-biggest iron ore exporter said an 8% increase in average realised price helped boost revenue, although this was partly offset by the group lagging its full-year shipment guidance. Cash costs were up 4%, reflecting higher labour and other costs.
The company has flagged a guidance for shipments of 190 million to 200 million tonnes in FY25, a slight improvement on the 192 million tonnes shipped in FY24. Its cash cost for hematite production is expected to come in at USD18.50 to USD19.75 per tonne, up from USD18.24 in FY24.
The source: ASX announcement
