Fortescue Metals Group (ASX: FMG) has reported a normalised net profit after tax of US$1.63 billion, a jump of 131% - but generally in line with market expectations, for financial year 2011.
Fortescue shares were trading 4% lower at A$5.81, in a very weak market.
Earnings per share were US$0.3286 versus US$0.1885 while cash flow from operating activities was a healthy US$2,778 million, up 106%.
A dividend a final fully franked dividend of A$0.04 per share was announced, up from the A$0.03 interim unfranked dividend.
The increase in underlying earnings was generated through revenue growth of 69% to US$5,442 million with key points being:
- Strong shipping volumes with total tonnes shipped of 40.9mt (Fortescue share 40mt). Fortescue maintained its steady state production prior to the commissioning of the new Christmas Creek facility at year end.
- Realised average iron ore CFR sales price of US$149 (dmt) reflecting the strong demand for iron ore across international markets.
These were offset by increases in underlying unit costs primarily as a result of:
- Significant appreciation of the Australian dollar over the year, up 12% on average.
- Increasing cash costs of mining due to rising strip ratios and the progressive ramp up of mining at Christmas Creek.