On August 26, Australian iron ore miner Fortescue announced its financial results for the financial year 2009-2010 (FY 2009-10) ended on June 30.
Fortescue's net profit of US$581 million in FY 2009-10 was up 14 percent compared with a net profit of US$508 million in the same period of FY 2008-09. When the same periods are compared, the company's sales revenues increased 76 percent from US$1.83 billion to US$3.22 billion. Fortecue's underlying earnings before interest, taxes, depreciation and amortization (EBITDA) of US$1.29 billion in FY 2009-10 was up 129 percent from US$562 million in the previous financial year.
The increase in underlying EBITDA was achieved primarily on the back of strong revenue growth, the company said, adding that the increase in shipments from 27.3 million mt last year to 38.9 million mt, the 17 percent hike in sales prices to China and reduced shipping costs all contributed to the increase in revenues.
The company said that these advantages were offset in the net profit data by significant appreciation of the AU$ over the year, and by higher cash costs created by the Christmas Creek operation due to the requirement to truck ore 50 kilometers to Cloudbreak for processing.
"The 2010 financial results mark a turning point for Fortescue as the company delivers strong cashflow after years of project development. Production and price increases are generating significant revenues and increasing cash balances. This is a great result for our shareholders," Andrew Forrest, chief executive officer, said.