FMG shares drop to new low

Iron ore producer FMG has seen a massive share price fall in line with the global stock market plunge, dropping all the way to $1.58 this morning at open of trade.

After steady trading in the $1.90s last week, the weekend saw Fortescue drop to $1.75 on Monday morning.

FMG has steadily improved this morning, regaining 10c by 11:30am.

The West Australian reported FMG recently slashed dividends for investors from 10c to only 2c per share, after a 27 per cent drop in revenue to US$8.574 billion.

With the announcement of underlying EBITDA of US$2.5 billion linked to production of 165mtpa and cost reductions, Fortescue CEO Nev Power said the results reflected improvements in productivity and efficiency.

“In a challenging environment of lower iron ore prices, this focus on efficiency and productivity from our world class assets will continue to see operational improvements and cost reductions while we maintain production at 165mtpa to create long term value for Fortescue shareholders,” he said.

The company said it has brought operating costs down to US$27 per wet metric tonne, which is 21 per cent less than last year.

Iron ore dropped again yesterday to US$53.28, the first significant drop since early July when the price fell to US$44.59.

FMG’s full-year shipping guidance for 2016 is pegged at 165 million tonnes.

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