Fortescue net profit plunges 41pc but Forrest defends green hydrogen strategy
Mining billionaire Andrew Forrest says the company remains hellbent on green hydrogen, despite walking away for much-hyped project and cutting jobs.
Fortescue founder Andrew Forrest says green energy and hydrogen projects remain central to its future, despite walking away from a number of much-hyped projects and cutting jobs in the sector in the past year.
The Forrest-led Fortescue recorded steep falls in profit and revenue from its core iron ore operations in 2024-25 while continuing to spend on decarbonising the mines and its green energy division.
Writing in the company’s annual report, Dr Forrest said: “Green hydrogen remains critical to our future. Its day is coming, and we will be able to switch on as much energy as we need without harming the planet and without making despots, who invade other countries using energy as a weapon, richer.”
Dr Forrest, Fortescue’s executive chairman, said the cost of producing green hydrogen would inevitably reach parity with fossil fuels, and Fortescue would be ready for that moment.
“We were told the world had moved on from recognising the existential threat of climate change. That the era of investing in green energy was drawing to a close. That ambition was out of fashion,” he said.
“But here we are, with those with courage staying the course on climate, an Australian government pushing to host a momentous global climate summit, and the global maritime sector on the brink of committing to an irreversible path to decarbonisation centred around – wait for it – green hydrogen with ammonia as its vector.
“Fortescue continues to point the way toward a zero-emissions economic future, and we are supporting global leaders in the shift we so desperately need for the survival of organic life.”
Fortescue reported full-year net profit of $US3.4bn ($5.24bn), down 41 per cent on the previous year. Revenue of $US15.54bn was down 15 per cent but in line with analysts’ expectations on the back of weaker iron ore prices.
Fortescue declared a final fully franked dividend of 60c, bringing total dividend payouts for the year to $1.10 compared to $1.97 in 2023-34.
Dr Forrest and Nicola Forrest, who are separated but collectively control 36.7 per cent of Fortescue, will pocket about $678m from the final dividend.
The 2024-25 dividend return is the smallest paid by Fortescue in seven years, but still delivered the Forrests about $1.24bn in total.
Fortescue’s direct carbon emissions from mining increased to 2.64 million tonnes in 2024-25, up by almost 300,000 tonnes on the previous 12 months, and it remains one of Australia’s biggest emitters.
The company said the increase was driven by increased gas consumption to meet growing power demand from its troubled Iron Bridge magnetite operations.
Fortescue energy boss Guy Pichot backed Dr Forrest’s comments about green energy and green hydrogen remaining “key to our future”, despite its decisions to abandon some projects, which prompted a call to pay back grants issued by state and federal governments.
The company’s plans have a hydrogen-powered green iron plant completed by the end of December has also suffered a setback. Fortescue has delayed completion of the small scale project, slated to eventually produce 1500 tonnes of so-called green iron a year, at the Christmas Creek mine until 2026.
Last month, Fortescue abandoned two of its most hyped green hydrogen projects but remains committed to plans to decarbonise the company’s core iron ore operations.
Fortescue ditched plans to spend almost $900m on a hydrogen project in the US state of Arizona, blaming policy changes under the Trump administration for the move.
It also walked away from a part-built green hydrogen project in Gladstone, Queensland that was slated to produce up to 22 tonnes of hydrogen a day using electrolyser technology developed in-house.
Fortescue estimated a pre-tax writedown of about $US150m on the two abandoned green hydrogen projects.
Perth-headquartered Fortescue spent $US405m on efforts to decarbonise its iron ore mines in 2024-25, up from $US224m. Capital expenditure on the green energy division fell slightly from $US317m to $US312m.
It has forecast capital expenditure of $US900m-$US1.2bn on decarbonisation in 2025-26. The spend is part of $US6.2bn committed to eradicating diesel use and all other carbon emissions from it mines by 2030 without using offsets. The plan includes a large-scale transition to renewable energy, including solar and wind farms, battery storage, and rolling out a green trucking fleet.
Fortescue fetched an average price of $US85 a tonne for its core hematite iron ore product, compared to $US103 a tonne in the prior year.
The Iron Bridge magnetite operations produced 7 million tonnes for export at an average price of $US133 a tonne, down from $US137 in 2023-24.
Fortescue blamed a number of factors for the lower price, including its changing product mix from its Pilbara mine and “geopolitical uncertainty and sentiments related to US trade policies”.
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