FMG
Fortescue LTD
ASX
September 2024 Quarterly Production Report
Sentiment:
Quarterly Production Report
23 October 2024 6:04 PM
Fortescue Metals Group reported record first-quarter iron ore shipments of 47.7 million tonnes, exceeding expectations and driven by strong performance at its Iron Bridge mine, while also highlighting significant progress in its green initiatives.
Better than expected
The record first-quarter iron ore shipments of 47.7 million tonnes exceeded expectations, driven by strong performance at the Iron Bridge mine.
Summary
- Fortescue reported record first-quarter iron ore shipments of 47.7 million tonnes (Mt), a 4% increase compared to the same period last year.
- Iron Bridge mine contributed 1.6Mt to the total shipments, exceeding its full-year FY24 shipments.
- Hematite C1 cost increased by 12% year-on-year to US$20.16/wet metric tonne (wmt), mainly due to a higher strip ratio and inflationary pressures.
- Hematite average revenue was US$83/dry metric tonne (dmt), realizing 83% of the average Platts 62% CFR Index.
- Iron Bridge Concentrate revenue was US$111/dmt, representing 97% of the average Platts 65% CFR Index.
- The company had US$3.4 billion in cash and US$2.1 billion in net debt at the end of the quarter.
- Fortescue signed a US$2.8 billion partnership with Liebherr for zero-emission mining solutions.
- Construction began on the Green Metal Project at Christmas Creek.
- The Billion Opportunities program awarded over A$5 billion in contracts to First Nations businesses.
- An externally verified Climate Transition Plan was released, aiming for Real Zero emissions by 2030.
- Dr. Larry Marshall was elected as the new Lead Independent Director.
Sentiment
Score: 8
Explanation: The report highlights strong operational performance, record shipments, and significant progress in green initiatives, indicating a positive outlook.
Highlights
- Record first-quarter iron ore shipments of 47.7 million tonnes (Mt)
- 4% increase in iron ore shipments compared to Q1 FY24
- Iron Bridge contributed 1.6Mt to total shipments
- Hematite C1 cost of US$20.16/wmt, a 12% increase year-on-year
- Hematite average revenue of US$83/dmt, realizing 83% of the Platts 62% CFR Index
- Iron Bridge Concentrate revenue of US$111/dmt, 97% of the Platts 65% CFR Index
- US$3.4 billion cash and US$2.1 billion net debt at 30 September 2024
- US$2.8 billion partnership with Liebherr for zero-emission mining solutions
- Over A$5 billion in contracts awarded to First Nations businesses through the Billion Opportunities program
- Group TRIFR of 1.2, a 29% improvement year-on-year
Positives
- Record first-quarter iron ore shipments of 47.7Mt, exceeding expectations.
- Strong performance at Iron Bridge mine, contributing 1.6Mt to total shipments.
- Significant progress in green initiatives, including the US$2.8 billion partnership with Liebherr and commencement of the Green Metal Project.
- Improved safety record, with a Group TRIFR of 1.2, a 29% decrease year-on-year.
- Over A$5 billion in contracts awarded to First Nations businesses.
- Release of an externally verified Climate Transition Plan aiming for Real Zero emissions by 2030.
Negatives
- Hematite C1 cost increased by 12% year-on-year to US$20.16/wmt due to higher strip ratio and inflationary pressures.
Risks
- Continued inflationary pressures could impact future costs.
- Dependence on global iron ore market prices.
- Challenges in achieving ambitious green energy targets.
Future Outlook
Guidance for FY25 shipments (190-200Mt, including 5-9Mt for Iron Bridge), C1 cost (US$18.50-US$19.75/wmt), and capital expenditure remains unchanged.
Management Comments
- 'Fortescue had a strong start to FY25 with record first quarter iron ore shipments of 47.7Mt...This strong operating performance means we are on track to meet our FY25 market guidance.' Dino Otranto, Fortescue Metals CEO
- 'It has been an extremely successful quarter for our green technology team...We topped off the milestone by also signing one of the biggest equipment deals on record...' Mark Hutchinson, Fortescue Energy CEO
Industry Context
Fortescue's strong performance in Q1 FY25, particularly its record iron ore shipments, positions it favorably within the iron ore industry. The company's significant investments in green technologies and sustainability initiatives also align with broader industry trends towards decarbonization and responsible mining practices.
Next Steps
- Continue to meet FY25 market guidance.
- Progress green energy projects globally.
- Complete feasibility studies for green hydrogen projects.
- Commence a feasibility study for a 1Mt per annum capacity green iron metal project in the Pilbara in 2025.
- Begin operations at the United States Advanced Manufacturing Center in Detroit.
Key Dates
- 30 September 2023: Group TRIFR of 1.7
- August 2024: Billion Opportunities program milestone of over A$5 billion in contracts awarded
- 30 September 2024: Cash of US$3.4 billion and net debt of US$2.1 billion
- October 2024: Fortescue Zero announced plans to begin operations at its US Advanced Manufacturing Center
- September 2024: Fortescue's Revolving Credit Facility and Syndicated Term Loan were amended and extended
- 2025: First production planned for the Green Metal Project
- 2025: Feasibility Study proposed to commence for a 1Mt per annum capacity green iron metal project
Keywords
Iron Ore, Mining, Fortescue Metals Group, Green Energy, Sustainability, Shipments, Production, Financial Results, Quarterly Report, First Nations
FMG
Fortescue LTD
ASX
Sector: Materials
Filings with Classifications
Worse than expected
19 February 2025 4:18 PM
Half Year Results
- The company's revenue, NPAT, EBITDA, and free cash flow all decreased compared to H1 FY24, indicating a decline in financial performance.
Better than expected
19 February 2025 4:18 PM
Half Year Results
- The record half-year iron ore shipments of 97.1Mt indicate better than expected operational performance.
Delay expected
19 February 2025 4:18 PM
Half Year Results
- The schedule for Iron Bridge operating at nameplate capacity of 22Mt per annum is under review, potentially delaying full production.
- The development timeframes of Fortescue's Arizona Project and Gladstone PEM50 Project are being reconsidered.
Delay expected
19 February 2025 4:17 PM
Half Year Report
- The final piece of work, the development of a Safety and Duress App, has been granted an extension until July 2025.
Worse than expected
19 February 2025 4:17 PM
Half Year Report
- The net profit after tax decreased compared to the prior period due to lower average revenue and increased costs.
Better than expected
4 February 2025 5:20 PM
Merger Announcement
- The offer price increased from A$1.05 to A$1.20 per share, which is better than the initial offer.
Capital raise
4 February 2025 4:45 PM
Supplementary Targets Statement
- The document mentions that if the Offer lapses, there is a strong possibility that Red Hawk will need to conduct an equity raise and Shareholders may be diluted.
Capital raise
27 January 2025 5:59 PM
Merger Announcement
- Red Hawk's cash balance as at 31 December 2024 was $1.3 million.
- If shareholders do not accept the Offer, then there is a strong possibility that Red Hawk will need to conduct an equity raising in the near term and shareholders may be diluted.
Better than expected
27 January 2025 5:59 PM
Merger Announcement
- The offer price is higher than the independent expert's assessed valuation range.
- The offer provides a significant premium to recent historical trading prices.
Better than expected
27 January 2025 5:27 PM
Merger Announcement
- The offer represents a significant premium to the recent trading price of Red Hawk shares, indicating a better than expected outcome for shareholders.
Better than expected
27 January 2025 5:22 PM
Takeover Bidder's Statement
- The offer price represents a significant premium to the recent trading price of Red Hawk shares, making it a better outcome for shareholders compared to the current market valuation.
Better than expected
27 January 2025 4:59 PM
Merger Announcement
- The offer represents a significant premium to Red Hawk's share price, making it a better outcome for shareholders than the current market valuation.
Better than expected
22 January 2025 5:30 PM
Quarterly Production Report
- The company achieved record half-year shipments, indicating better than expected operational performance.
- The company's hematite C1 costs were 10% lower than the previous quarter, indicating better than expected cost control.
- The company's TRIFR was 44% lower than the previous year, indicating better than expected safety performance.
Better than expected
23 October 2024 6:04 PM
Quarterly Production Report
- The record first-quarter iron ore shipments of 47.7 million tonnes exceeded expectations, driven by strong performance at the Iron Bridge mine.
Delay expected
24 July 2024 6:28 PM
Quarterly Production Report
- The ramp up to full production capacity at Iron Bridge is still expected in the September quarter 2025.
Better than expected
24 July 2024 6:28 PM
Quarterly Production Report
- The company achieved record iron ore shipments, indicating better than expected operational performance.
- The company's Total Recordable Injury Frequency Rate (TRIFR) improved by 28% to 1.3, indicating better than expected safety performance.
Worse than expected
23 April 2024 6:31 PM
Quarterly Production Report
- Iron ore shipments were 6% lower than Q3 FY23 due to the ore car derailment and weather disruptions.
- Pilbara Hematite C1 cost increased by 7% compared to the previous quarter due to lower sales volumes.
- Pilbara Hematite average revenue realized only 85% of the average Platts 62% CFR Index due to timing of sales.
Delay expected
23 April 2024 6:31 PM
Quarterly Production Report
- Shipments are expected to be at the lower end of the FY24 guidance range due to the derailment and weather impacts.
Worse than expected
1 April 2024 6:34 PM
Project Update
- The lapse of the buyer condition precedent in the PPA with Fortescue introduces uncertainty to the project, making the results worse than expected.
Delay expected
1 April 2024 6:34 PM
Project Update
- The buyer condition precedent was not satisfied by the revised sunset date of 31 March 2024, potentially delaying the project's financial close.
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