Forrest's $1bn Fortescue reward

Andrew Forrest will have an income of nearly $1 billion this financial year after Fortescue Metals Group announced a 60 cent per share final dividend today.

The dividend, which will be paid next month, is in addition to an 11 cent per share special dividend in February and a 19 cent per share interim dividend.

All up, Fortescue will pay shareholders 90 cents this financial year, or nearly $2.8 billion.

Mr Forrest, who serves as chairman, controls 35.2 per cent of the company, with almost 1.1 billion shares.

He will earn $654 million from the final year dividend announced today.

That is on top of roughly $327 million from dividend payments already this financial year.

Mr Forrest has increased his holdings of Fortescue, with his most recent series of transactions during the final week of November acquiring 30 million shares, valued at $117.6 million.

Those are held through the Minderoo Group, Forrest Family Investments and other associated entities.

All of that additional money, after tax, will now be unlocked for Mr Forrest’s charitable activities or other business investments.

Last week, Mr Forrest and wife Nicola Forrest announced $655 million of donations over the next six months, bringing total allocations from the Minderoo Foundation to $1.5 billion.

That money will go towards fighting childhood cancer, improving ocean health, stopping slavery and other human rights abuses, childhood development and education scholarships.

Digging deep

The big lift in Fortescue's dividend followed strong growth in earnings, underpinned by a 47 per cent increase in the realised price of iron ore to $US71 per tonne.

The company put that down to supply disruptions, a moderation of margins in steel mills and good growth in Chinese steel production.

Fortescue chief executive officer Elizabeth Gaines said the business had good cashflow.

“The strength of our operating cashflows enables further accelerated distribution of franking credits to eligible shareholders, inclusive of the financial year 2019 interim and special dividends totalling A$0.30 per share,” Ms Gaines said.

“The ability to deliver this increased return to our shareholders reflects the success of our integrated operations and marketing strategy, enhanced product mix as well as the strength of demand for iron ore.

“Our investment in growth through the Eliwana and Iron Bridge projects represents a total investment of $US3.9 billion and positions Fortescue to deliver on our strategy of (having) a majority of our products being greater than 60 per cent iron grade.”