Fortescue posts another strong quarterly result
Fortescue Metals Group continued its relentless costcutting and debt-repaying drive in the December quarter, the iron ore miner’s quarterly production report has shown.
The Andrew Forrest-chaired miner announced last week its C1 cash production costs had fallen another 7 per cent over the quarter to $US12.54 per wet metric tonne, down a massive 21 per cent on the previous corresponding quarter.
The Pilbara miner also paid off another $US1 billion in debt, reducing its gross gearing to 36 per cent and net gearing to 30 per cent.
Net debt was lowered to $US4 billion at the end of the year, inclusive of $US1.2 billion in cash and $US600 million of finance leases.
Fortescue shipped 42.2 million tonnes of iron ore in the December quarter, down 4 per cent on the previous quarter’s figure of 43.8 million tonnes, but in line with previous guidance.
The miner gave full-year shipment guidance of 165-170 million tonnes, subject to weather events and full-year cost guidance of $US12-13 per wet metric tonne.
Chief executive Nev Power said Fortescue had delivered another strong quarterly result, achieving improved safety performance, consistent production and sustained cost reductions across all operations.
“Through continued focus on efficiency and productivity initiatives, C1 costs were lowered for the 12th consecutive quarter to US$12.54/wmt,” he said. “Our strong operating results together with positive market conditions have generated excellent cashflow, which supported a further US$1 billion of debt repayments in December.
“Initial gearing targets have been surpassed and it is pleasing to see the ratings agencies recognise our performance and upgrade their ratings and outlook accordingly.”
Fortescue Metals Group chief executive Nev Power.