Fortescue Metals Group Ltd [ASX:FMG] has had quite a bumper of a half year. The FMG share price is up today 1.77% at time of writing after releasing its half-year results.
Fortescue logs in record half-year shipping, earnings and operating cash flow
For the six months to December 2020 Fortescue recorded revenues of US$9.34 billion, up 44% from the same period last year. Net profit after tax was US$4.08 billion, a 66% increase from the US$2,464 it recorded in the same period last year.
The company shipped 90.2 million metric tonnes, up 2% from the same period last year.
With such great results, the company said they’ll be distributing a record dividend of $1.47 cents a share, a 93% improvement from the interim dividend it declared last year.
The company also told investors their Iron Bridge magnetite project will be costing US$400 million more than originally planned. The estimated cost is now at US$3 billion, with production expected to start on the second half of 2022.
Underpinning Fortescue’s success are high iron ore prices and strong demand from China
Iron ore prices have gone to reach US$166 a tonne after Brazilian iron ore Vale hit some hiccups in production and off the back of strong demand from China.
Fortescue got average realised prices of US$114.02 per dry metric tonne, a 42% increase from the US$80.36 per dry metric tonne it got in the same timeframe last year. A price that, according to the company, outperformed the increase in the Platts 62% CFR Index which registered a 32% rise for the same period.
For FY21, the company expects iron ore shipments to be in the range of 178–182 metric tonnes. At time of writing, Fortescue’s shares are trading at $24.84 — that’s an over 122% increase in the last 12 months.
High iron ore prices have also boosted the Australian dollar higher. So far the Australian dollar is up 36% against the US dollar since it collapsed in March.
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