(Kitco News) - Australia’s third-largest iron ore miner posted a profit of $6.2 billion in the 2021–22 financial year (FY22), down from $10.3 billion in FY21. While the profit was down 40 percent Y/Y, it still represents the second-highest earnings result in the firm's history. Shipments of 189 million tonnes of iron ore reflect a steep drop in the price of the steel-making material amid an economic slowdown in China.
The price for iron ore is currently hovering around $108 per tonne after a high of almost $160 per tonne in March 2022. Fortescue said the 189 wet metrics million tonnes of iron ore it shipped in FY22 “exceeded the top end of guidance” and was a major contributor to the bottom line.
Chief executive officer Elizabeth Gaines said “Guided by our unique culture and values, the team has delivered another year of record operational performance for FY22, contributing to net profit after tax of $6.2 billion, the second highest annual profit in Fortescue’s history,” Gaines, who is stepping down from the role and into the company’s minerals division, said in the FY22 results announcement.
The profits also mean a windfall dividend for Fortescue shareholders, with the chairman – and major shareholder – Andrew Forrest taking home $2.34 billion. She added “Reflecting our ongoing commitment to delivering enhanced shareholder returns, the Board has declared a fully franked final dividend of $1.21 per share, bringing total dividends declared for FY22 to $2.07 per share,” Gaines said.
“This represents a 75 percent payout of full-year net profit after tax, consistent with our stated intent to target the upper end of our policy to payout a range of 50 to 80 percent of NPAT (net profit after tax).”
Shares in the firm fell nearly 5% on Monday but the ASX was also trading down due to general negative market sentiment. The price had been moving higher in recent sessions and the most recent move down could be a blip in the recovery. Time will tell if the previous wave high will break at 20.05 and this could be confirmation of the continued uptrend. On the downside, the level to watch is the green shaded area at 16.30.
