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Fortescue's FY'19 profit surges 263%; dividend up 5x

Fortescue Metals Group Ltd. said Aug. 26 that fiscal 2019 net profit surged 263% to a record US$3.19 billion, or US$1.03 per share, on the strength of iron ore prices earlier this year.

The Australian iron ore major declared a fully franked final dividend of 24 Australian cents per share. This brought its full-year dividend to A$1.14 per share, ballooning nearly five-fold from the year-ago dividend of 23 cents per share.

An increase in the shipment volume of higher value products, higher product demand and sustained strength in benchmark iron ore prices resulted in a 45% revenue increase to US$9.97 billion for the year.

The Australian iron ore miner reported an underlying EBITDA of US$6.05 billion, a 90% increase, resulting from favorable iron ore prices, as well as consistent operational cost performance.

Full-year shipments for the Australian iron ore major totaled 167.7 million tonnes, a 1% decrease from 170 Mt a year earlier, due to the impact of Tropical Cyclone Veronica. Iron ore production, meanwhile, grew 10% to 48.5 Mt.

C1 operating costs for the full year ended June 30 grew 6% to US$13.11 per wet tonne, resulting from increased costs associated with longer haul distances, higher fuel prices and increased salaries and wages.

Meanwhile, Fortescue reiterated its fiscal 2020 guidance of shipping between 170 Mt and 175 Mt of iron ore at a C1 cash cost of between US$13.25 to US$13.75 per wet tonne. Capital expenditure is budgeted at US$2.4 billion.