Fortescue Metals Group - FY24 Financial Performance Overview
FMG (FMG) Share Update August 2024 Tuesday 27th
Fortescue Metals Group Reports Strong Financial Performance in FY24
Fortescue Metals Group Ltd (ASX: FMG) has reported strong financial results for the fiscal year ending June 30, 2024, showcasing significant growth and robust performance across various metrics.
Instant Summary:
- Iron ore shipments reached 191.6 million tonnes.
- Net profit after tax (NPAT) stood at US$5.7 billion.
- Revenue totaled US$18.2 billion.
- Underlying EBITDA was US$10.7 billion.
- Earnings per share (EPS) were US$1.85.
- Declared total dividends of A$1.97 per share, representing a 70% payout ratio.
Operational Performance
Fortescue Metals Group reported iron ore shipments of 191.6 million tonnes for the fiscal year 2024. The company's industry-leading hematite C1 cost was US$18.24 per wet metric tonne (wmt), reflecting its operational efficiency.
Revenue for the year was US$18.2 billion, driven by strong iron ore prices and high shipment volumes. The average revenue per dry metric tonne (dmt) of hematite was US$103, with a realization rate of 86%.
Financial Results
Fortescue's net profit after tax (NPAT) for FY24 was US$5.7 billion, demonstrating the company's profitability. The underlying EBITDA reached US$10.7 billion, with an EBITDA margin of 59%.
Earnings per share (EPS) were US$1.85, highlighting the company's strong financial performance. Fortescue declared total dividends of A$1.97 per share for the year, maintaining a 70% payout ratio in line with its dividend policy.
Cash Flow and Balance Sheet
The company generated a net operating cash flow of US$7.9 billion and free cash flow of US$4.9 billion. Fortescue's robust balance sheet is supported by US$5.4 billion in cash on hand and a net debt of US$0.5 billion.
Capital expenditure for the year was US$2.9 billion, with investments allocated towards sustaining and hub development, exploration, decarbonization, and energy projects.
Future Outlook
For FY25, Fortescue has provided guidance for iron ore shipments between 190-200 million tonnes and a C1 cost range of US$18.50 to US$19.75 per wmt. The company is also advancing its Iron Bridge concentrate shipments and green energy projects, including green hydrogen and renewable energy initiatives.
Fortescue's strong financial performance and robust cash flow generation are likely to positively impact its stock price. The company's commitment to maintaining a high dividend payout ratio and its strategic investments in growth and decarbonization projects will likely bolster investor confidence.
Investor Reaction:
Analysts are expected to react positively to Fortescue's financial results, noting the company's strong operational performance and strategic focus on sustainability and growth. The high dividend payout and robust cash flow generation are likely to be well-received by investors.
Conclusion:
Investors should consider Fortescue's strong financial performance and strategic initiatives when making investment decisions. The company's focus on operational efficiency, sustainability, and growth positions it well for future success. Staying informed on Fortescue's developments and market conditions will be crucial for investors.