Fortescue Metals Group topped market forecasts on its final dividend payout, and easily met profit hopes from investors for the year to June 30.
The country’s No 3 iron ore exporter yesterday revealed a sharp increase in final dividend to 12 cents a share from 2 cents for the last six months of 2014-15.
With the 3 cents a share interim set earlier this year, Fortescue will pay shareholders (including chairman, Andrew Twiggy Forrest) 15 cents a share For Mr Forrest that will be around $150 million.
The miner reported a net profit after tax of $US985 million ($A1.3 billion) for the 2016 financial year, up 21% from a result of $US316 million a year earlier (down 88% from the year before), despite a fall in revenue due to weaker iron ore prices.
Underlying earnings before interest, taxes, depreciation and amortisation increased 27% year-on-year to $US3.2 billion while revenue fell 17% to $US7.1 billion. The profit result was well under the $US2.74 billion net profit earned in the year to June,2014.
The profit surge was thanks to the attack on costs made by the company in the past 18 months or so, lower interest rates and using surplus cash to buyback and reduce Fortescue’s debt pile.
The company said the results was driven by a sustained focus on productivity, cutting costs per wet metric tonne to $US14.31 in June, the tenth consecutive quarterly fall.
Fortescue’s average realised price for iron ore in 2016 was $US45.36 a dry metric tonne.
Fortescue CEO Nev Power said in yesterday’s ASX statement the company’s operational performance had driven the improved results.
"Successful cost improvement measures and lower capital expenditure have more than offset the impact of falling iron ore prices to generate strong free cash flow," Mr Power said.
Shares in Fortescue have climbed about 175% over the past 12 months to close at $4.93 on Friday. The shares fell 2.4% to $4.81 yesterday. Fortescue shipped 169.4 million tonnes of ore in the year to June.
Fortescue also repaid $US2.9 billion of debt in 2016. The June 30 net debt figure was $US5.2 billion and the company strongly suggested it had the capacity to make more repayments. Net cash on hand at the end of the year was $US1.6 billion.
