Australia’s Fortescue Metals said it expects solid iron ore demand this year given China’s support for its property and construction sectors, as it reported lower profit and dividends for the first half and flagged persistent inflationary pressure.
Fortescue was seeing “really good” demand for its lower grade iron ore after the Chinese New Year, given compressed margins at steelmakers, Chief Executive Fiona Hicks said on Wednesday. Steelmakers tend to buy cheaper ore when their profits are under pressure.
“We expect (good demand) to continue. The (Chinese) government has been quite vocal in terms of their support for the construction and real estate sectors, so we expect to see that translate to real steel demand towards the end of the year,” Hicks said on an earnings call.
At the same time, Fortescue noted operating costs rose by 14% due to significant demand for skilled labor across the mining sector and a crippling inflationary environment across the globe, to average $17.43 per wet metric tonne.
Against that backdrop, Fortescue is set to retrench up to 1,000 staff from global and local operations, the Australian newspaper reported last week.
Company executives did not confirm job cuts, but founder and executive chairman Andrew Forrest said: “The typical pattern of Fortescue we grow, steady the ship, consolidate … and grow again.”
Given the turbulence in markets due to interest rates, Fortescue has “stuck to its knitting,” with these results being ordinary after an exceptional last year, said David Lennox, a resource analyst at Fat Prophets in Sydney.
The Perth-based company declared an interim dividend at A$0.75 per share, compared with last year’s A$0.86, as miners keep cash on hand for growth projects.
The world’s fourth-biggest iron ore miner offered fresh detail on its plans to develop a global green hydrogen business.
It is due to make a decision this year on five projects that it will develop and one of those is likely to be in Texas, Fortescue Future Industries Chief Executive Mark Huchinson said.
For the first half ended Dec. 31, Fortescue received $87 per dry metric tonne (dmt) for its iron ore, down from $96 per dmt a year earlier, after logging record shipments of 96.9 million tonnes, up 4% from a year ago.
Given the turbulence in markets due to interest rates, Fortescue has “stuck to its knitting,” with these results being ordinary after an exceptional last year, said David Lennox, a resource analyst at Fat Prophets in Sydney.
The Perth-based company declared an interim dividend at A$0.75 per share, compared with last year’s A$0.86, as miners keep cash on hand for growth projects.
The world’s fourth-biggest iron ore miner offered fresh detail on its plans to develop a global green hydrogen business.
It is due to make a decision this year on five projects that it will develop and one of those is likely to be in Texas, Fortescue Future Industries Chief Executive Mark Huchinson said.
For the first half ended Dec. 31, Fortescue received $87 per dry metric tonne (dmt) for its iron ore, down from $96 per dmt a year earlier, after logging record shipments of 96.9 million tonnes, up 4% from a year ago.
Source: CNBC
