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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Fortescue Metals Group Limited    FMG   AU000000FMG4

FORTESCUE METALS GROUP LIMITED

(FMG)
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Australia's Fortescue posts record iron ore shipments, beats full-year forecast

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07/29/2020 | 08:35pm EDT

* Boost from strong demand in China on Beijing stimulus measures

* Q4 shipments 47.3 Mt, ahead of estimates; FY shipments 178.2 Mt

* Sees shipments of 175-180 Mt for year ahead

MELBOURNE, July 30 (Reuters) - Miner Fortescue Metals Group on Thursday beat its full-year iron ore estimates with record shipments in the fourth quarter on the back of strong demand for the steel-making ingredient from China.

Resurgent demand for iron ore from the world's biggest importer of the raw material has buoyed prices that have far outperformed other commodities, even as much of the rest of the world is still gripped by the coronavirus pandemic.

Fortescue, the world's fourth-largest iron ore miner, shipped 47.3 million tonnes (Mt) of the steel-making material in the quarter ended June, up from the 46.6 million tonnes a year ago and ahead of an average estimate of 46.1 Mt from three brokerages.

The company reported shipments of 178.2 Mt for the year, above the miner's own upgraded forecast of 175-177 Mt, and forecast shipments of 175-180 Mt for the year ahead, boosted by expectations that Beijing will continue with stimulus efforts to stoke the world's second-biggest economy.

"Fortescue is going from strength to strength," said Andy Forster, Senior Investment Officer at Argo Investments. "Everyone's waiting for the dividend now and to see what they do next."

Shares rose as much as 3.5% to a record high before trading at A$17.25, up 2.4%, by 0038 GMT.

Fortescue received $80.64 dry metric tonne (dmt) over the quarter, or about 86% of the average Platts 62% CFR Index price, slightly short of a UBS estimate for 90% or of $84.20 per dmt.

On Wednesday, Rio Tinto said it saw a sharp V-shaped recovery in China as stimulus spurred industrial activity, helping its first-half profit beat market expectations. Both Rio and BHP reported higher iron ore output thanks to strong conditions in China.

Fortescue's costs did rise, though, to $13.02 per wet metric tonne in the quarter, nearly 2% higher than a year ago due to COVID-19.

It also slightly raised its cost projections for its Eliwana Mine and Rail project to $1.325 billion to $1.375 billion from $1.275 billion due partly to costs associated with COVID-19 impacts. First ore is expected on train in December.

(Reporting by Melanie Burton in Mebourne and Nikhil Kurian Nainan in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)


Stocks mentioned in the article
ChangeLast1st jan.
ARGO GROUP LIMITED 0.00% 18.5 Delayed Quote.-24.49%
ARGO INVESTMENTS LIMITED -0.40% 7.52 End-of-day quote.-13.66%
BHP GROUP -2.21% 34.94 End-of-day quote.-10.23%
FORTESCUE METALS GROUP LIMITED -2.41% 16.21 End-of-day quote.51.64%
RIO TINTO PLC -1.33% 4427 Delayed Quote.-0.37%
UBS GROUP AG -1.43% 11.035 Delayed Quote.-8.43%
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Financials (USD)
Sales 2021 14 311 M - -
Net income 2021 5 499 M - -
Net Debt 2021 751 M - -
P/E ratio 2021 9,32x
Yield 2021 7,60%
Capitalization 49 890 M 35 643 M -
EV / Sales 2021 3,54x
EV / Sales 2022 4,53x
Nbr of Employees -
Free-Float 50,1%
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Mean consensus HOLD
Number of Analysts 18
Average target price 11,26 $
Last Close Price 16,21 $
Spread / Highest target -11,9%
Spread / Average Target -30,5%
Spread / Lowest Target -66,4%
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Managers
NameTitle
Elizabeth Anne Gaines Chief Executive Officer & Executive Director
John Andrew Henry Forrest Chairman
Greg Lilleyman Chief Operating Officer
Ian Wells Chief Financial Officer
Mark Bradley Barnaba Deputy Chairman
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