Finance Finance News Fortescue almost quadruples profit

Fortescue almost quadruples profit

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Australia’s third largest iron ore miner, Fortescue Metals, has almost quadrupled profits as it ramps up output.

Fortescue’s half-year profit surged 259 per cent from the same period a year ago to $US1.71 billion ($1.9 billion), which is in line with market expectations.

The miner lifted shipments of ore by 51 per cent over the period as the first ore from its new Kings mine in Western Australia was delivered.

The company’s revenue rose 77 per cent on solid iron ore prices and rising production.

Costs of production also fell 34 per cent, which the company contributes to savings initiatives and a lower Australian dollar.

Fortescue’s chief executive Nev Power says it vindicates the company’s rapid expansion strategy.

“This record result underlines the continued success of Fortescue’s strategy to rapidly construct new capacity, ramp up production and drive down costs,” he noted in the report.

“The ongoing strong demand for our products has allowed us to accelerate debt repayment, de-risk the balance sheet and increase returns to our shareholders.”

Fortescue has already redeemed $140 million of preference shares and $US1 billion in debt early as part of a voluntary debt reduction program, with a further $US1.6 billion debt repayment announced in January this year.

Shareholders will receive a dividend of 10 cents a share fully-franked.

The company’s shares were up 0.5 per cent to $6.01 by 1:00pm (AEDT).