September 2019 Quarterly Production Report

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    A strong start to FY20 with shipments of 42.2mt and C1 costs of
    Fortescue has released its September 2019 quarterly production results, reporting shipments of 42.2
    million tonnes (mt) and cash production costs (C1) of US$12.95 per wet metric tonne (wmt).
    Quarterly highlights
    • Safety TRIFR of 2.7, an improvement of four per cent compared to 30 June 2019
    • Shipments of 42.2mt, five per cent higher than Q1 FY19
    • C1 costs of US$12.95/wmt, two per cent lower than Q1 FY19
    • Average revenue received of US$85 per dry metric tonne (dmt), 89 per cent higher than Q1 FY19
    of US$45/dmt
    • Repayment of US$200 million and re-financing of the balance of the US$1.4 billion Term Loan on
    improved terms
    • Net debt of US$0.5 billion at 30 September 2019, compared to US$2.1 billion at 30 June 2019
    • Sod turning ceremony for the Eliwana Mine and Rail project on 5 July 2019
    • Commencement of towage operations at the Port of Port Hedland on 5 September 2019
    • Renewal of the A$500 million share buy-back program for a further 12 months to October 2020
    Fortescue Chief Executive Officer, Elizabeth Gaines, said “The Fortescue team has delivered a strong
    performance across all aspects of the business in the first quarter of FY20, building on our record
    results in FY19. Importantly, our safety performance has maintained its positive trend with a four per
    cent improvement in TRIFR to 2.7.
    “Fortescue’s outstanding operational performance across mining, processing, rail and port delivered
    shipments of 42.2mt, a five per cent improvement on Q1 FY19, at a C1 cost of US$12.95/wmt.
    Through the quarter we maintained our enhanced product mix with strong demand for our range of
    products, including our 60.1% iron content West Pilbara Fines. This is reflected in Fortescue’s
    contractual price realisation which averaged 89 per cent of the benchmark 62% CFR Index price
    during the quarter.
    “The combination of operational performance and realised price has generated exceptional operating
    cashflows and lowered net debt to US$0.5 billion at 30 September 2019. This has provided the
    capacity to further strengthen the balance sheet through debt reduction and refinancing of the Term
    Loan on improved terms.

    • The Total Recordable Injury Frequency Rate (TRIFR) reduced to 2.7 on a rolling 12-month
    basis (2.8 at June 2019).
    Fortescue remains focussed on improving safety performance through sustained risk reduction
    activities and projects. Initiatives such as the “Take Control” program are delivering improvements
    in safety culture and performance across the business.
    • Mining, processing, rail and shipping combined to achieve quarterly shipments of 42.2mt, five
    per cent above Q1 FY19 and nine per cent lower than the record performance in the June quarter,
    reflecting seasonal maintenance activity. Full year shipping guidance remains at 170-175mt.
    During the quarter a number of new mining areas were developed, resulting in an increase in
    overburden removal, ensuring Fortescue is well positioned to deliver on its product strategy. As
    a result, strip ratios were slightly higher at 1.7 during the quarter and are expected to average 1.5
    for FY20.
    Ore processing was five per cent higher than Q1 FY19, and the variance to the June quarter
    reflects seasonal maintenance activity.
    • C1 costs of US$12.95/wmt reflect disciplined cost management, mining and processing
    performance. Total Australian dollar cash costs were consistent with the June quarter with C1
    costs benefitting from the lower Australian dollar and changes to the accounting treatment of

    • Crude steel production in China reached 745 million tonnes[1] for the nine months ended 30
    September 2019, 8.4 per cent higher than the prior comparable period, underpinning demand for
    seaborne iron ore. Iron ore stocks at Chinese ports at the end of the quarter were 120 million
    tonnes, five million tonnes higher than the prior quarter, representing approximately 42 days of
    inventory. Iron ore demand is supported by continuing high levels of steel production, decreased
    use of scrap and mill restocking.
    • Demand for Fortescue’s products in the quarter remained strong with Chinese steel mills
    focussed on raw material costs in response to current steel margins.
    • Fortescue’s average revenue was US$85/dmt in the quarter. The average contractual price
    realisation increased to 89 per cent of the average 62 CFR Index price of US$102/dmt during the
    quarter. The closing Platts 62 CFR Index price at 30 September was US$93/dmt (US$118/dmt at
    30 June).
    • West Pilbara Fines shipments were stable at 10 per cent of quarterly shipments, in line with
    guidance of 17-20mt for FY20.
    • Non-China markets accounted for six per cent of total shipments during the quarter.
    Balance sheet
    • Cash on hand increased to US$3.4 billion at 30 September 2019 from US$1.9 billion at 30 June
    2019. Included in the 30 September cash balance are amounts reserved for the payment of the
    FY19 final dividend of US$0.5 billion in October and the FY19 final tax payment of US$0.6 billion,
    due in December.
    • Net debt reduced to US$0.5 billion with gross debt of US$3.9 billion at 30 September 2019.
    During the quarter US$200 million of debt was repaid and changes to the accounting treatment of
    leases added US$175 million to balance sheet liabilities.

    [1] Source: China’s National Bureau of Statistics
    Page 4 of 6
    • Fortescue’s debt maturity profile following the successful US$600 million Senior Unsecured
    Note issue and subsequent Term Loan repayment and refinancing is set out in the chart

    courtesy of Bell Direct

    part of a much larger release

    ( DYOR )

    looks like i have missed the boat on FMG ( i do not hold this share ) but then i waited over 3 years for my price on BPT ( and was well rewarded for that patience ) , maybe there is some chance

  2. 14.1k

    Impressive result. This is a long term hold, happy holder. It's a buy and forget stock now, and just wait for dividend cheques

    1 like
  3. 69.9k

    i was looking for $8 a share , but that looks like a dream in the short term

    great company , i agree , but this is an unusual up in the iron price , and shareholders sometimes scare easily , i will wait

  4. 1.9k

    dot com stock

    1 like
  5. 1.9k

    Fortescue is the new millionaire's factory
    Julie-anne Sprague and Robert Guy
    Jan 23, 2020 — 12.00am


    Mining magnate Andrew Forrest is on track to claim the title of Australia's richest man as surging iron ore prices fuel a staggering rally in the shares of Fortescue Metals Group.

    Fortescue shares climbed another 5 per cent on Wednesday to close at a record $12.69, valuing Mr Forrest's stake in the iron ore miner at $13.8 billion.

    Fortescue Metals Group founding director Graeme Rowley...sitting on shares worth over $100 million. Photo: Philip Gostelow

    Combined with his other investments, Mr Forrest's wealth has reached $15.9 billion, eclipsing the $15.6 billion which put cardboard king Anthony Pratt into the top spot on last year's Financial Review Rich List.

    The surging iron ore price, which has leapt from $US80 per tonne to $US94.80 per tonne in less than three months, will also boost Gina Rinehart's fortune.

    Mrs Rinehart occupies second spot on the Rich List with an estimated wealth of $13.8 billion, a figure which will jump significantly if iron ore prices continue to rally. Mr Forrest sat in 7th spot in last year's list with a $7.9 billion fortune.

    FMGFortescue Metals Group


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    Updated: Jan 22, 2020 — 6.50pm. Data is 20 mins delayed.
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    RIORio Tinto


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    The iron ore rally helped push Rio Tinto to $107.38, its highest close since September 2008. BHP is hovering at six-month highs at $41.21.

    Former chief executive Nev Power left Fortescue in February 2018. If he held on to his shares, they were worth a tidy $37 million on Wednesday. Photo: Graham Uden

    Fortescue was the third best-performing stock on the S&P-ASX 200 index on Wednesday and has gained a staggering 18.7 per cent since the start of the year.

    But it's not just the billionaires benefiting from stronger iron ore prices. Along with government coffers, there's a number of former and current Fortescue executives who are seeing their humble holdings transform into serious cash piles. And there are long-time backers of Mr Forrest.

    Kie Chie Wong, the Australian emissary of a Sarawak timber-milling family who first backed Mr Forrest in Anaconda Nickel, has retained a 3 per cent stake through his Emichrome investment company.

    While far smaller than the 26.5 per cent he once held, it's enough to push the 71-year-old into the nation's billionaire's club (on paper at least). Emichrome's holding was valued at $1.2 billion. Not bad considering it's understood Wong picked up his original holding for about $1 million.

    Former Rio Tinto executive Graeme Rowley, who was among a small group of executives who helped Mr Forrest hatch plans to create Australia's third force in iron ore in 2003, is sitting on 8.2 million shares (according to Bloomberg data). They were worth $105 million on Wednesday.

    Peter Meurs, who left Fortescue for Salt Lake City and a senior role with the Mormon church in 2016, had interests in shares that, if retained, were worth $124.5 million on Wednesday.

    Former chief executive Nev Power left Fortescue in February 2018. If he held on to his shares, they were worth a tidy $37 million on Wednesday. Mr Power didn't retain the entire holding, but says he did keep "a few" and is "enjoying the ride".

    Current chief executive Elizabeth Gaines' equity stake was worth $4.9 million. Trevor Collens

    Current chief executive Elizabeth Gaines' equity stake was worth $4.9 million. Deputy chief executive Julie Shuttleworth has a stake valued at $5 million.

    When former chief financial officer Stephen Pearce left the miner to join Anglo American as its finance director in 2016 he held just over 300,000 shares. If he's held on to those shares, he has a handsome $3.8 million paper holding.

    Iron ore prices have rallied from just below $US80 a tonne (including freight charges) in November to around $US95 a tonne amid signs of a stabilisation in China's growth.

    The world's second-largest economy grew at a 6 per cent pace in the fourth quarter, highlighting Beijing's success in steadying growth through cuts to market-based interest rates, increased lending, lower bank capital requirements and the fast-tracking of infrastructure spending.

    The recovery in China's industrial production has been reflected in iron ore demand, with the north Asian giant importing 101 million tonnes in December - the second highest on record.

    Andrew Forrest enjoyed a huge jump in hi personal fortune last year.
    Can Andrew Forrest's world-beating run roll on?
    The signing of the US-China trade deal has helped steer more upbeat economic outlooks for voracious resource consumers China and Japan - Australia's two largest trading partners.

    The International Monetary Fund raised its 2020 forecast for China's growth to 6 per cent, from 5.8 per cent, while the Bank of Japan has lifted its growth forecast for each year out to 2021.

    Some of the world's most respected investment banks - Morgan Stanley, JPMorgan and Goldman Sachs - have delivered bullish assessments for the steel making raw material over the past week.

    china markets generic economy asia rowe
    Rampaging bulls hope China has their backs
    They see ongoing strength in Chinese demand, the possibility of lower than expected shipments from Brazilian producer Vale, and a potential disruption to India's iron ore industry from the re-awarding of mining concessions.

    The upbeat outlook for iron ore prices in 2020 has been reflected in the forward curve for iron ore futures traded in Singapore. The curve has moved up from between $US60-70 a tonne in October to between $US80 to $US90 a tonne.

    The rebound in global growth expectations has prompted fund managers to lift their exposure to commodities to a net 10 per cent overweight position, according to Bank of America. This is the highest since March 2012.


    License article

    Rich listers

    Andrew Forrest

    Gina Rinehart

    Iron ore

    1 like
  6. 1.9k

    took a short stop $13

    1 like
  7. 1.9k

    shorts pay day $$$$$ today

  8. 3.1k

    Short the shit out of it now.........imo

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