Fortescue's New Dividend Reinvestment Plan and Impressive FY24 Financial Performance
FMG (FMG) Share Update August 2024 Tuesday 27th
Fortescue Announces Dividend Reinvestment Plan and Strong FY24 Results
Fortescue Ltd (ASX: FMG) has announced the implementation of a Dividend Reinvestment Plan (DRP) for its shareholders, alongside reporting robust financial results for the fiscal year ending 30 June 2024.
Instant Summary:
- Introduction of a Dividend Reinvestment Plan (DRP) starting September 2024.
- Net profit after tax increased by 18% to US$5.7 billion.
- Revenue from ordinary activities rose by 8% to US$18.2 billion.
- Total dividends for FY24 amounted to A$1.97 per share.
- Strong operational performance with 191.6 million tonnes of iron ore shipped.
Dividend Reinvestment Plan
Fortescue has introduced a Dividend Reinvestment Plan (DRP) that allows eligible shareholders to reinvest their dividends into additional ordinary shares. The allocation price for these shares will be calculated based on the average daily volume-weighted average market price of Fortescue shares traded on the Australian Securities Exchange over five trading days starting from 9 September 2024.
The deadline for applications to participate in the DRP or to alter participation is 5:00pm (WST) on 6 September 2024. No discount will apply to the allocation price, and the plan will not be underwritten. Shares will be acquired on market and transferred to participants on 27 September 2024, with a broker engaged to assist in the process.
Financial Performance
For the fiscal year ending 30 June 2024, Fortescue reported a net profit after tax of US$5.7 billion, an 18% increase from the previous year. Revenue from ordinary activities rose by 8% to US$18.2 billion, driven by strong demand and higher iron ore prices.
Fortescue's net tangible asset backing per ordinary share increased to US$6.22, up from US$5.75 in the previous corresponding period. The company declared total dividends of A$1.97 per share for FY24, compared to A$1.75 per share in the previous year.
Operational Highlights
Fortescue shipped 191.6 million tonnes of iron ore in FY24, maintaining its position as one of the world's largest iron ore producers. The company also highlighted its commitment to sustainability, with significant progress in decarbonization initiatives, including the operation of a hydrogen-powered battery electric haul truck prototype.
The introduction of the DRP is expected to enhance shareholder value by providing an option to reinvest dividends into additional shares, potentially increasing shareholding over time. The strong financial performance, marked by an 18% increase in net profit and higher dividends, is likely to positively influence investor sentiment and Fortescue's stock price.
Investor Reaction:
Analysts have reacted positively to Fortescue's financial results and the introduction of the DRP. The strong profit growth and increased dividends are seen as indicators of the company's robust operational performance and strategic management.
Conclusion:
Investors should consider participating in the DRP to maximize their returns. Fortescue's strong financial performance and commitment to sustainability position the company well for future growth. Stay tuned for further updates and strategic developments from Fortescue.