Fortescue Metals stated Monday its annual profit almost tripled and declared a bumper dividend, helped by healthy production and soaring iron ore costs amid a supply shortfall.
Fortescue’s outcome comes amid a windfall for iron ore miners earlier in the year after supply disturbances and strong demand from China sent costs hovering. The miner’s shares have almost doubled thus far this year.
The world’s fourth-largest iron ore miner posted a final dividend of A$0.24 each share, double what it paid in 2018, bringing its total profit to A$1.14.
The price Fortescue received for its ore in the June quarter surged 30% from the earlier quarter to $92 per dry metric tonne, reducing its discount to benchmark 62% iron ore to 13 % from as wide as 37% a year prior, the miner said in July.
Fortescue recorded a full-year underlying net revenue after tax of $3.19 billion, slightly below estimation of $3.21 billion from Credit Suisse. In 2018, it reported a profit of $1.08 billion.
“We have seen a powerful start to FY20 and Fortescue is well-positioned to proceed to provide benefits to all stakeholders,” Chief Executive Officer Elizabeth Gaines stated in a statement.
In July, the miner forecast stronger iron ore deliveries in 2020 but also flagged higher prices as it ramps up manufacturing to fulfill the demand from China, its largest market.
The result comes as global supply is normalizing, sparking an abrupt fall in iron ore prices in August. Global economic headwinds from the Sino-U.S. trade conflict have further raised fears that demand could slow.