Australia’s Fortescue announced a $8 billion dividend with record profits

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Mining update

Fortescue Metals Group said it will pay USD 8 billion in dividends because the Australian mining company announced record annual iron ore shipments and net profit after tax against the backdrop of China’s economic rebound.

Monday’s strong performance closely followed rivals BHP Billiton and Rio Tinto, They also reported record profits and billions of dollars in dividend payments.

Fortescue shipped 182.2 million tons of iron ore in the 2020-2021 fiscal year China’s investment momentum The economy recovered from the Covid-19 crisis and global supply chain obstacles.

After announcing net profit of 10.3 billion U.S. dollars, an increase of 117% and a total dividend of 11 billion Australian dollars (8 billion U.S. dollars), Fortescue’s stock price rose more than 6% on Monday.

“Under the guidance of our unique culture and values, the Fortescue family has set record performance for the second year in a row. Its shipments, revenue and operating cash flow have exceeded any year in Fortescue’s history,” CEO Elizabeth Gaines said.

Steelmaking raw material prices Soaring iron ore In the past year, May reached a peak of more than $230 per ton.

Analysts say that, just like the pandemic, years of insufficient investment have reduced the supply of iron ore. Restricted commodity supply chainFortescue reports capital investment of US$3.6 billion in the past year, adding that the structure of its balance sheet is to fund future growth.

“Fortescu maintains a very strong balance sheet, which is reflected in its low leverage ratio. Although the company has declared record dividends, its strong cash generation capabilities and conservative financial position have provided an opportunity to absorb increased shareholder returns Good ability,” said David Xu, an analyst at the rating agency Moody’s.

“With the advancement of the Iron Bridge project and the potential investment opportunities in renewable energy and green hydrogen projects, the company can fund potentially higher capital expenditures,” Xu added.

In the past year, Fortescue has spent $2.1 billion on three major growth projects, including Iron bridge, The company hopes to produce 22 million tons of iron ore by mid-2022.

The group also established Fortescue Future Industries, a green energy and renewable energy branch. It allocated US$1 billion in capital expenditures for FFI in 2021, of which US$122 million has already been spent. It expects expenditures in the 2021-22 fiscal year to increase to US$400 million to US$600 million.

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