Fortescue iron ore output up, costs down
Fortescue has maintained its full year guidance after outstripping expectations for first quarter iron ore output.
Fortescue Metals has maintained its full year guidance after outstripping market expectations for first quarter iron ore output.
For the three months to September 30, the WA-based miner (FMG) reported total shipments of 43.8 million tonnes, above the average analyst projection for 42.5 million tonnes.
Fortescue has reaffirmed guidance for shipments of 165-170 million tonnes for the 2017 financial year.
The miner also beat expectations on costs, with production expenses trimmed a further 5 per cent compared to the prior quarter, to $US13.55 per wet metric tonne.
The figure represents a 20 per cent improvement on this time last year and beats market estimates for a reading of $US14 a tonne.
It also has Fortescue on track to meet full-year guidance for costs between $US12 and $US13 a tonne.
“Key to our sustained performance has been the alignment of our marketing and operations strategies to optimise production, maximise efficiency and consistently deliver quality products. This has driven C1 costs to US$13.55/wmt, the eleventh consecutive quarterly reduction, generating continued strong cash margins,” chief executive Nev Power said.
“All of our operations delivered strong production results during the quarter and most importantly we also achieved a company-wide improvement in safety performance of 36 per cent compared to a year ago.”
Mr Power did not follow BHP’s Andrew Mackenzie in discussing the current market conditions, although the company did note iron ore and steel markets “continued to be supported” by infrastructure and housing activity in China through the September quarter.
Fortescue detailed an average realised price of $US48.36/dmt for the quarter, while its net debt was further trimmed to $US4.2 billion thanks to a $US700 million repayment in the quarter.
The miner also said plans for a joint venture with Brazilian giant Vale to develop a blended product remained on the table, with discussions “continuing to progress”.