FMG profit slides 40%

Fortescue Metals Group has blamed a drop in iron ore prices last year for its 40 per cent fall in first-half profit.

The company made a net profit of $463.9 million in the six months to December, down from $781.8m in the previous period.

In announcing the results FMG said it had started 2013 stronger with cost cutting measures taking effect and commodity prices rebounding.

The company said a 32 per cent increase in production had gone some way to offset the 42 per cent decrease in iron ore prices and it was set to reduce operating costs by $300m this financial year.

Overall the miner shipped 35.7 million tonnes of ore in the six months to December, up 32 per cent on the previous period.

FMG also said while there had been short term volatility in the steel market, China still had a strong underlying economy and its new leaders were committed to spurring growth.

“We have exited the half a stronger and more resilient company with a renewed focus on achieving a production capacity of 155 million tonnes per annum by the end of calendar year 2013,” FMG CEO Nev Power said in a statement.

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