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- Fortescue Metals Group (FMG) reports strong operating performance in Q3 FY22, increasing its annual shipment targets for the rest of the year
- The company’s mining, processing, rail and shipping combined to deliver shipments of 46.5 million tonnes, 10 per cent higher than Q3 FY21
- Strong volumes and an ongoing focus on cost management offsets market inflation across key input costs, including diesel, other consumables and labour rates
- Net debt stands at US$2.4 billion (A$3.37 billion) at March 31 after payment of the interim dividend of US$2.0 billion and capital expenditure of US$830 million in the quarter
- FMG shares are up 2.99 per cent, trading at $20.70
Australian mining giant Fortescue Metals Group (FMG) has reported a strong operating performance in Q3 FY22, increasing its annual shipment targets for the rest of the year.
The company’s mining, processing, rail and shipping combined to deliver shipments of 46.5 million tonnes, 10 per cent higher than Q3 FY21, which contributes to record shipments for the nine months to March 31 of 139.5 million tonnes.
The C1 cost of US$15.78 (A$22.14) per wet metric tonnes (wmt) in Q3 FY22 was three per cent higher than the previous quarter and six per cent higher than Q3 FY21.
Strong volumes and an ongoing focus on cost management were offset by market inflation across key input costs, including diesel, other consumables and labour rates.
Fortescue CEO Elizabeth Gaines attributed the strong result to “the successful delivery and ramp up of the Eliwana project, and execution of our integrated operations and marketing strategy”.
This results in the full-year shipment guidance increasing to between 185 million tonnes and 188 million tonnes, compared to 180 million tonnes to 185 million tonnes, reflecting the strong operating performance in the nine months to March 31.
Fortescue’s average revenue of US$99.52 per dry metric tonnes (dmt) in Q3 FY22 represents revenue realisation of 70 per cent of the average Platts 62 per cent CFR Index of US$141.60 per dmt which was 68 per cent in Q2 FY22.
Strong progress has been reported at the company’s Iron Bridge Magnetite project which will deliver 22 million tonnes per annum of high grade 67 per cent iron magnetite concentrate.
During the quarter, the project achieved key milestones which includes five module ships unloaded at Port Hedland, taking the total of the project to date to 14 of 21 module ships, completion of earthworks for the Concentrate Handling Facility (CHF) at Port Hedland and awarded mechanical and electrical works contract at the CHF.
However, net debt has increased and is now at US$2.4 billion at March 31 after payment of the interim dividend of US$2 billion and capital expenditure of US$830 million in the quarter.
Fortescue has also successfully completed a US$1.5 billion offering of Senior Notes on April 7, including Fortescue’s inaugural US$800 million Green Senior Note issue.
The offer with the cash proceeds will go towards decarbonisation initiatives which are underway at Fortescue, which targets carbon neutrality by 2030.
FMG shares were up 2.99 per cent, trading at $20.70 as of 10:06 am AEST.
