Fortescue shares jump on low FY25 costs, reduced energy spend
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More news: Fortescue shares rallied in morning trade after the iron ore miner reported record shipments for the 2025 financial year.
Shares were up 3.6% to $18.87 at 11:10am AEST, extending gains to 30% over the past month.
Citi analyst Paul McTaggart said lower-than-expected mining costs and a reduction in energy spend were the key positives from the result.
Fortescue sets full-year shipments record in 2025, cancels hydrogen projects
The news: Fortescue has reported record iron ore shipments in financial year 2025 and met “all aspects” of previously announced guidance.
The company also announced it will not advance its green hydrogen project in Arizona or the PEM50 green hydrogen project in Gladstone, despite already breaking ground on each development.
Both were put under review earlier this year amid slow global market development and after Fortescue significantly scaled back its hydrogen ambitions in July 2024.
The numbers: Total iron ore shipments for FY25 hit 198.4 million tonnes, 4% higher than the previous year, which was partly buoyed by a record 55.2 million tonnes in the June quarter.
Hematite C1 cash costs for the full year hit USD17.99 per wet metric tonne, the first decline since FY20, after coming in at USD16.29 in the June quarter. Average Hematite revenue was USD85 per dry metric tonne after coming in at USD82 in the June quarter.
Shipments of concentrate from Iron Bridge reached 7.1 million tonnes in FY25 of which 2.4 million tonnes was shipped in the June quarter. Nameplate capacity of 22 million tonnes per annum is expected to be achieved in FY28.
Fortescue also reported a cash balance of USD4.3 billion and net debt of USD1.1 billion at 30 June 2025. Capex in FY25 was USD3.9 billion.
FY26 guidance for total shipments is between 195 million tonnes and 205 million tonnes, including 10 million tonnes to 12 million tonnes. Guidance for C1 cash cost for hematite is USD17.50 to USD18.50 per wet metric tonne.
FY26 guidance for energy capex is abut USD300 million and net operating is expected at about USD400 million.
A pre-tax write down of an estimated USD150 million is expected for H2 FY25 relating to expenditure on the PEM50 project, electrolyser manufacturing equipment in Gladstone and engineering costs for the Arizona project.
The context: Fortescue Metals and Operations chief executive Dino Otranto said the annual result is “credit to the relentless focus of our teams on safety, efficiency and operational excellence”.
Looking forward, he expects to break new production records in FY26 and flagged strong support for Australia-China collaboration on a green iron and steel supply chain “which would drive investment, strengthen trade ties and eliminate emissions at scale”.
The source: ASX
