BULKS

FMG falls after rare quarterly miss

FORTESCUE Metals Group has reported a spike in C1 costs and lifted its full-year capital expenditure guidance.

 FMG's Christmas Creek mine in the Pilbara

FMG's Christmas Creek mine in the Pilbara

Iron ore shipments for the March quarter were 42.3 million tonnes, 9% down on the December quarter but in line with the previous year due to the impacts of the wet season in the Pilbara.

The rain was partially offset by the ramp-up of the new Eliwana operation.

Shipments for the nine months to March 31 were 132.9Mt, 2% higher than the previous year.

It puts FMG on track for record FY21 shipments of 178-182Mt.

C1 costs jumped 16% to US$14.90 per wet metric tonne due to lower shipments and the strength of the Australian dollar.

"This was well above our estimated of $13.5/wmt and consensus of $14.20/wmt," RBC Capital Markets analyst Kaan Peker said.

Year-to-date C1 costs were $13.45/t, which is still below full-year guidance of $13.50-14/t.

Average revenue was $143 per dry metric tonne, up 17%.

Revenue realisation was 86% of the Platts 62% CFR index.

Consensus was $149/t for revenue realisation of 89%.

Full-year capital expenditure guidance was lifted to $3.5-3.7 billion from the previous forecast of $3-3.4 billion.

Capex for the first nine months of the financial year was $2.8 billion.

A review of the Iron Bridge magnetite project is due to be completed next month.

FMG closed March with a cash balance of $3.6 billion, down $400 million after the payment of $3.5 billion in dividends and $909 million in capex.

Gross debt rose by $500 million to $4.6 billion, while net debt was $1 billion.

FMG shares dropped 0.8% to A$22.44. RBC maintained a sector perform rating and $21 price target.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

editions

MiningNews.net Research Report 2024

Access a multi-pronged tool to identify critical risks and opportunities in Australia’s mining industry.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.