Fortescue Metals Group has shrugged off the operational impact of COVID-19 by achieving record March quarterly shipments and an upgraded guidance.
The company shipped 42.3 million tonnes in the March 2020 quarter, which was up by 10 per cent from the 38.3 million tonnes shipped in the March 2019 quarter.
As a result, guidance for shipments in the 2020 financial year will be bumped from 175 million tonnes to 177 million tonnes.
Fortescue has nestled a healthy $US4.2 billion ($6.4 billion) of free cashflow as of March 31.
Capital expenditure guidance for the 2020 financial year will be updated from $US2 billion to $US2.2. billion as a result of Fortescue’s major growth projects.
According to Fortescue chief executive officer Elizabeth Gaines, the company’s balance sheet has “never been stronger”.
“Fortescue’s strong operating performance in the March quarter has delivered record shipments, increasing ten per cent compared to the prior comparable quarter, and a two per cent reduction in C1 costs maintaining our industry leading cost position. This result underpins an upgrade to our full year guidance for shipments,” she said.
“Fortescue is a core supplier of iron ore to China and we see strong ongoing demand for our products and anticipate a steady recovery in economic activity in that market.
“While the global economic outlook remains uncertain, our balance sheet has never been stronger and we continue to generate sustained cashflows and jobs, invest in growth and focus on delivering returns to our shareholders.”
Despite delivering a suite of positive outcomes, Fortescue has remained vigilant in managing the risk of COVID-19.
“The health and safety of our people, their families and the broader community is our priority, and we have been responsive to the unprecedented global COVID-19 health pandemic and economic crisis,” Gaines said.
“We are committed to ensuring robust plans are implemented to prevent the spread of infection to any of our sites, with a temporary extended operational roster introduced to reduce people movement, as well as measures to monitor the health of all team members and support best practice physical distancing at our operations.”
This includes the introduction of a two week on/one week off site roster, resulting in a 40 per cent reduction in people movement.
Furthermore, the recent introduction of a rapid screening process that includes temperature and health testing at Perth’s domestic airport, site aerodromes and offices has also been added.
The he company has also provided support to local communities with a $1 million donation to the Royal Flying Doctor Service.
Fortescue’s total recordable injury frequency rate (RIFR) for March 2020 also saw a drop of 2.5 from 2.8 in March 2019.
The company’s autonomous haulage project is also on track to be completed in the second half of the 2020 calendar year with its Iron Bridge and Eliwana iron ore projects continuing to progress.