SYDNEY--Fortescue Metals Group Ltd. said its annual net profit more than doubled as a surge in iron-ore prices more than offset rising costs.
Australia-based Fortescue, which reports results in U.S. dollars, Monday said net profit for the 12 months ended June 30 rose to $10.30 billion from $4.74 billion in the previous year.
Underlying profit--a measure that strips out some one-time items--increased to $10.35 billion from $4.75 billion in the previous year. That was below a $10.41-billion estimate compiled by Vuma from 11 analyst forecasts.
The company, the world's No. 4 iron-ore exporter, declared a final dividend of 2.11 Australian dollars a share ($1.54), taking its full-year payout to A$3.58 a share. That is double the previous year.
Iron-ore prices hit a record high in May, largely because of red-hot Chinese steel output. China's first-half steel output was up 12% on the year-earlier period, while steel production elsewhere in the world also largely rose.
Fortescue recently reported shipments of 182.2 million metric tons for the 12 months through June, up 2.0% on a year earlier. It expects to ship between 180 million and 185 million tons of the commodity in the year through June, 2022.
It ended June with a net cash balance of $2.7 billion, versus net debt of $258 million a year ago.
The company has, however, been grappling with rising costs linked in part to materials inflation and a strong labor market.
Full-year C1 costs--which don't include expenses such as royalties, shipping and overheads--were up 8.0% at $13.93 a ton. The miner forecast costs of between $15.00 and $15.50 a ton in its current fiscal year.
Iron-ore prices have also fallen sharply in recent weeks, suggesting Fortescue may enjoy a lesser tail wind from market conditions early in its new fiscal year. The benchmark price was Friday at $159 a ton, versus more than $220 as recently as mid-July, according to S&P Global Platts.
