Fortescue final dividend gives Andrew Forrest $124.5m payday
Fortescue Metals Group’s billionaire chairman Andrew “Twiggy” Forrest has been dealt another big payday.
Fortescue Metals Group’s billionaire chairman Andrew Forrest has been dealt another big payday despite the company’s profit slide.
Now comfortable with its debt level, the iron ore miner announced a 12 cent per share final dividend on Monday, translating to a $124.5 million payout for mining magnate Mr Forrest.
The dividend brings Fortescue’s full-year payout for 2017-18 to 23c per share and the chairman’s full-year payout to $239m.
It is the second-biggest full-year dividend paid by the company since its maiden full-year dividend of 7c in 2010-11 and brings total payouts to Mr Forrest to around $US1.3bn.
“The outstanding financial performance of Fortescue has benefited all shareholders,” Mr Forrest said.
“As shareholders, Nicola (Forrest) and I choose to use our dividends to fund the important work of the Minderoo Foundation and to support and contribute to programs that strengthen communities and support disadvantaged people in Australia and overseas.”
The philanthropic Minderoo Foundation was founded by Mr Forrest and his wife in 2001 and was previously called The Australian Children’s Trust.
While the full-year dividend is down 49 per cent on 2016-17’s record 45c per share, the most recent payout ratio of 62 per cent is well up on that year’s 52 per cent ration, in recognition that the company has now met targeted gearing levels and will return more surplus cash to investors.
Fortescue chief executive Elizabeth Gaines said the company had now completed balance sheet restructuring.
“(This) saw Fortescue’s capital allocation weighted more heavily towards shareholder returns resulting in a payout ratio of 62 per cent of full year net profit after tax, ensuring that our shareholders benefit from our success following the rapid de-gearing of the balance sheet,” she said.
But despite the bigger than expected dividend, Fortescue revealed on Monday that revenue and profit had been hit by a lower iron ore price.
Fortescue’s annual profit plunged 58 per cent as weaker prices for its lower-grade ore more than offset a further reduction in costs. Fortescue reported net profit of $US879 million for the 12 months through June, down from $US2.1bn the year before. Underlying profit of $US1.1bn, which stripped out one-off refinancing costs, met analysts’ expectations.
