Fortescue results surge ahead

Finance

Publishing Date: 26 Aug 2010 11:02am GMT
Author: Mining Journal

Fortescue Metals Group, Australia’s third largest producer of iron ore, has reported a 14% rise in net profit for the year to end-June.

With iron-ore prices increasing by 17%, Fortescue’s net profit grew to US$581 million, up from US$508 million a year earlier. This helped guide the company’s revenue 76% higher to US$3.2 billion.

Chief executive Andrew Forrest said: “The 2010 financial results mark a turning point for Fortescue as the company delivers strong cashflow after years of project development. Production and price increases are generating significant revenue and increasing cash balances.”

In other results, underlying earnings before interest, tax depreciation and amortisation (EBITDA) surged to US$1.3 billion, more than double the 2009 figure.

Cash flow from operating activities was US$1.1 billion, and cash flow from investment activities was US$583 million. Fortescue also increased shipments of ore to 38.9Mt and third party shipments of 1.16Mt.

Chief financial officer Stephen Pearce said: “The 129% increase in underlying EBITDA to US$1.3 billion is a true reflection of the company’s ability to generate superior returns. With strong operating margins and growing cash balances, Fortescue is developing a major platform for growth.”