Australia's Fortescue profit falls 40% on weak iron ore prices

Australian miner Fortescue Metals Group on Monday said its annual profit fell 40% as weaker iron ore prices due to cooling demand from top consumer China, escalating costs and labor shortages chipped away at its earnings.

Annual profit at Fortescue Metals Group, the world's fourth-largest iron ore miner, took a hit as iron ore prices are pressured due to persistent worries over demand from top steel producer China. Its margins were further crimped by rising costs and a labor shortage.

As a result, the Perth-based miner earned average revenue per dry metric tonne (dmt) of iron ore of $99.80 during the year, down from $135.32/dmt for the previous year, when the miner saw record earnings.

Also underpinning the drop in profit was the shortage of skilled labor in the aftermath of the COVID-19 pandemic, which has raised personnel costs across Australia's mining sector.

Fortescue, which is about 37%-owned by billionaire Andrew Forrest, reported annual underlying net profit after tax of $6.20 billion, down from a record $10.35 billion a year ago. It was largely in line with a Refinitiv estimate of $6.24 billion.

The miner declared a final dividend of 1.21 Australian dollars per share, down from AU$2.11 apiece declared last year.