Fortescue Metals Group is one of the largest iron ore producers in the world and it has performed exceptionally well during a very turbulent 2020. FMG has returned over 100% in the past year, with significant gains in the past 6 months. High iron ore prices and a halt in operations to one of its biggest competitors has resulted in an exceptional share price performance. They are also one of the top dividend stocks listed on the ASX with current annual yields coming in at over 9%. FMG is arguably the best pure play iron ore stock on the ASX. They have had a record half year with shipments, earnings, and operating cash flows being at all time highs.
With iron ore prices sky high, their full year profits will swell once again – leading to higher dividend payouts. FMG is a top class ASX share to own right now with high iron ore prices and a strong Aussie dollar providing tailwinds.
FMG shares were buoyant today on the back of its Q4 Production Report. FMG share price reached an all time high as the firm once again had a record performance during the quarter ending June 30th. Among the highlights were:
- Record iron ore shipments of 49.3 million tonnes (mt) for the quarter and 182.2mt for FY21, exceeding guidance of 182mt.
- Record average revenue of US$168/dry metric tonne (dmt) for the quarter, realising 84% of the average Platts 62% CFR Index, and US$135/dmt for FY21
- C1 cost for Q4 FY21 of US$15.23/wet metric tonne (wmt), 2% higher than the previous quarter, with C1 cost for FY21 of US$13.93/wmt in line with guidance
- Strong free cash flow generation contributed to cash on hand of US$6.9 billion and net cash of US$2.7 billion at 30 June 2021, compared to net debt of US$1.0 billion at 31 March 2021.
FMG CEO, Elizabeth Gaines, said “The Fortescue team has delivered excellent results for the June quarter, with record quarterly shipments of 49.3 million tonnes contributing to our highest ever annual shipments of 182.2 million tonnes in FY21.
In addition to the stellar results, FMG shares were also boosted as the firm announced their guidance for FY22. FY22 guidance for shipments of 180 – 185mt and C1 cost of US$15.00 – US$15.50/wmt, and capital expenditure guidance (excluding FFI) of US$2.8 – US$3.2 billion, inclusive of sustaining and development capital, major projects and exploration. FMG’s Fortescue Future Industries is progressing a global portfolio of renewable green energy projects and decarbonisation technologies with FY22 expenditure anticipated to be US$400 – US$600 million.
In light of the spectacular result and the guidance update, the market reaction was extremely positive as FMG share price surged 1.9% and closed at $26.30 a share – an all time high for FMG shares.
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