Fortescue chairman Andrew Forrest will have to make do with a reduced half-year dividend of approximately $973 million, after severe price penalties on lower quality iron ore dragged Fortescue’s earnings lower over the first half.

Fortescue paid an 86¢ interim dividend on Wednesday after announcing a 32 per cent slide in first half net profit to $US2.77 billion ($3.87 billion) as costs for labour, fuel and shipping all rose. That was down from $US4.08 billion a year earlier.