Fortescue has reported US$985 million in profit in its latest end of year results, a 212 per cent increase year on year.
The miner recorded an underlying EBITDA of US$3.195 billion, an increase of 27 per cent from the previous corresponding period, while cash flow also increased dramatically by 48 per cent this year, to US$3.023 billion, despite actual revenues falling 17 per cent year on year to US$7.083 billion.
According to FMG, a combination of increased productivity, operational efficiencies, and its plan to drive down debt have helped offset the ongoing lower iron ore prices, pushing the miner’s C1 operating costs to US$14.31 per wet metric tonne, a level comparable to Rio Tinto’s unit costs of US$14.30 per tonne.
Fortescue CEO Nev Power thanked the workers for the result.
“The entire Fortescue team has delivered on safety, production, and cost targets resulting in outstanding FY16 results,” Power said.
“Successful cost improvement measures and lower capital expenditure have more than offset the impact of falling iron ore prices to generate strong free cash flow,” he said.
Power went on to state, “We have repaid US$2.9 billion of debt in FY16, reducing net debt to US$5.2 billion and will continue to repay debt from operating cashflows.”
FMG also achieved a 15 per cent improvement in its safety levels, hitting its TRIFR target of 4.3.
The miner is now looking forwards to 2017, forecasting a shipping guidance level of between 165 million and 170 million tonnes, and lowered operating costs of between US$12 and US$13 per wet metric tonne.