Fortescue shares the spoils of record profit

FORTESCUE Metals has declared a $2.11-a-share dividend on the back of record profits for the financial year, delivering a $2.39bn payout for founder and chairman Andrew Forrest.

Fortescue booked a $Us10.3bn ($14.1bn) after-tax profit for the financial year, up 117 per cent on the previous period, finishing June 30 with $Us2.7bn in net cash.

Chief executive Elizabeth Gaines said the $2.11-a-share final dividend brought the company’s total payout to $3.58 a share for the year – about 80 per cent of Fortescue’s net profit after tax, at the top end of the company’s policy of returning 50-80 per cent of net profits to shareholders.

Including the final dividend, Fortescue will now have paid out more than $6bn in dividends to Dr Forrest over the past three years, as the iron ore price surged.

Fortescue’s revenue lifted 74 per cent to $Us22.3bn for the full year, with the company’s underlying earnings before interest, tax, depreciation and amortisation up 96 per cent at $Us16.4bn on revenue of $Us22.3bn.

Ms Gaines said the result was Fortescue’s best ever return.

“The Fortescue family has delivered a second consecutive year of record performance, with shipments, earnings and operating cashflow surpassing any year in Fortescue’s history,” she said in a statement.

“Through the Iron Bridge Magnetite project and Fortescue Future Industries, we are investing in the growth of our iron ore operations, as well as pursuing ambitious global opportunities in renewable energy and green industries.”

And although benchmark iron ore prices have tumbled in the past two months, dipping below $US200 a tonne in late July and trading at about $US150 a tonne last week, with prices for lower grade ores falling even further, Fortescue’s margins are still strong.

In July, the iron ore major again lifted its export guidance for the current financial year, saying it expected to ship 180-185 million tonnes in the full year to the end of June next year.

Fortescue’s $Us5.7bn dividend adds to the run of huge shareholder returns from the iron ore majors, after BHP declared a $Us10bn final shareholder payout for its full year, and Rio Tinto declared a $Us9.1bn interim return.

Fortescue also indicated it would join Rio and BHP in announcing targets to reduce its so-called scope 3 carbon emissions – those produced by its iron ore customers.

Fortescue already has the most aggressive carbon reduction targets in the sector, having pledged carbon neutrality by 2030.