Fortescue Metals Group Ltd.'s net profit in the first half of its fiscal 2018 slumped 44% year over year to US$681 million, or 21.9 cents per share, as revenue dropped 18% to US$3.68 billion, according to the company's Feb. 21 results.
Underlying EBITDA fell 31% to US$1.83 billion due to a decline in revenue, partially offset by the cost improvements and productivity initiatives.
Total iron ore shipments in the half-year period reached 84.5 million tonnes, with C1 operating costs improving to average US$12.11 per wet tonne in the first half, representing a 7% year over year reduction on the back of productivity and efficiency initiatives.
CapEx in the first half totaled US$413 million, inclusive of sustaining capital, ship construction, exploration and development expenditure.
Fortescue is targeting shipments of 170 million tonnes of iron ore in fiscal 2018, with C1 cost guidance of between US$11 and US$12 per wet tonne. CapEx for the full year is estimated at about US$900 million.
The miner reduced its net debt to US$4.2 billion as at Dec. 31, 2017. Fortescue secured a US$1.40 billion term loan facility from a syndicate of financial institutions, with the proceeds to be used to redeem a portion of its senior secured notes maturing 2022 through a tender and/or redemption, lowering annual borrowing costs by about US$80 million.
The group declared an interim fully franked dividend of 11 Australian cents per share, equating to a 40% payout of net profit after tax.
The Australian iron ore producer noted in a separate same-day release that Elizabeth Gaines assumed the company's CEO role, effective Feb. 19, moving from her CFO position. Gaines replaced Nev Power, who announced his intention to step down from the position in September 2017. Power has also resigned from Fortescue's board.