Weak iron ore price hurts Fortescue profits
Iron ore miner Fortescue Metals Group’s first half profit has dropped 40 per cent because of weaker ore prices.
But the company says it has had a strong start to the second half of the 2012/13 financial year with iron ore prices returning to high levels and cost savings being realised.
Fortescue made a net profit $US478 million ($463.99 million) in the six months to December 31, down from $US801 million in the previous corresponding period.
It will not be paying shareholders an interim dividend, and said it would review its dividends after its full year result is announced.
The company paid a dividend of four cents for the previous corresponding period.
Fortescue has maintained its full year guidance of shipping between 82 million tonnes and 84 million tonnes of iron ore.
‘‘Despite challenging market conditions during the half, we have delivered record operational performance from our world class assets,’’ chief executive Nev Power said in a statement.
‘‘Increased production volumes have in part offset price volatility.’’
The average price for iron ore was $US118 per dry metric tonne in the first half of the financial year, down from $US160 in the previous corresponding period, Fortescue said.
‘‘We have exited the half a stronger and more resilient company with a renewed focus on achieving a production capacity of 155 million tonnes per annum by the end of calendar year 2013 to underpin sustainable future earnings and increasing shareholder value,’’ Mr Power said.
The company shipped 35.7 million tonnes of ore in the six months to December, up 32 per cent from the previous corresponding period.