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Fortescue Group joins iron ore bonanza: Reports 41% profit increase

Fortescue Group (ASX:FMG) has joined the December half-year iron ore bonanza already shared by Rio Tinto, BHP, Mount Gibson, and Mineral Resources.

The world’s fourth-largest iron ore exporter (after Rio, BHP, and Vale of Brazil, which reports tonight) revealed that net profit rose 41% to $US3.3 billion ($5 billion) for the six months ended December 31.

Sales were up 21% to $US9.5 billion as the company benefited from higher exports and prices.

Iron ore shipments of 94.6 million tonnes for the December 2023 half-year were the second-highest ever for the first half.

Underlying EBITDA of $US5.9 billion was 36% higher than a year earlier, with an underlying EBITDA margin of 62%.

The company said its average revenue was $US108/dry metric tonne (dmt), which was 89% of the average Platts 62% CFR Index, up from $US87/dmt and an 86% realization in the same period of 2022-23.

The company said the key C1 cost measure was $US17.77 per wet metric tonne, up 2%.

The company lifted its interim dividend 44% to $A1.08 per share, from 75 cents a share a year earlier, meaning a multimillion-dollar rise for founder and chair, Andrew ‘Twiggy’ Forrest.

With a 36.7% stake in Fortescue’s 3.08 billion shares, the lift in dividend means Mr. Forrest and his interests will receive more than $A900 million.

Fortescue Metals CEO, Dino Otranto, said in Thursday’s announcement that “Fortescue’s performance in the first half of FY24 has been excellent, with the team achieving our second-highest first-half shipments while maintaining our strong focus on safety and keeping our costs low.”

“This contributed to outstanding financial results, with EBITDA of US$5.9 billion and net profit after tax of US$3.3 billion.

“Whether it’s through our first green energy projects, our diversification into the high-grade segment of the iron ore market through Iron Bridge, or expansion of our global footprint with the Belinga Iron Ore Project in Gabon, we remain committed to creating value for all our stakeholders,” he said.