Investing.com-- Australian iron ore miner Fortescue Metals Group Ltd (ASX:FMG) reported a drop in its annual profit on Monday as weak iron prices, driven by fears of slowing Chinese demand, offset record shipments through the year.
Fortescue’s underlying net profit after tax in the year to June 30 slumped 40% to $6.2 billion, with revenue down 22%. But the profit reading was in line with estimates.
The world’s fourth largest iron ore producer by output said average revenue earned per dry metric tonne of iron ore shipped fell 26% through the year, even as its ore shipments rose 4% to 189 million wet metric tonnes.
The iron ore miner forecast 2023 ore shipments between 187 million to 192 million tonnes, with capital expenditure of $2.7 billion to $3.1 billion.
Iron ore prices crashed by over a third of their value in the past 12 months, as dwindling industrial activity in China due to continued COVID-19 lockdowns severely dented demand for the metal. The trend is expected to continue through the remainder of the year, given Beijing’s hesitance to budge on its strict zero-COVID policy.
Data over the weekend showed that the country’s industrial profits fell through the first seven months of the year, amid increased disruptions from COVID-related measures.
