22/01/2021 - 13:30

Fortescue flags huge profit jump

22/01/2021 - 13:30

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Fortescue Metals Group has achieved an extraordinary jump in net profit to $US940 million in the month of December, highlighting the impact of sky-high iron ore prices.

Fortescue flags huge profit jump
BIG PLANS: Andrew Forrest says Fortescue is better placed than Tesla to be a climate change challenger.

Fortescue Metals Group has achieved an extraordinary jump in net profit to $US940 million in the month of December, highlighting the impact of sky-high iron ore prices.

The monthly profit was disclosed by chairman Andrew Forrest during a live recording last night of the ABCs annual Boyer lecture (see related article).

Fortescue told the ASX this morning that the monthly figure was based on preliminary unaudited management accounts.

The company added that unaudited net profit for the half-year to December 2020 would be in the range of $US4 billion to $US4.1 billion.

That’s up from a net profit of $US2.4 billion in the half-year to December 2019 and just $US644 million in the half-year to December 2018.

The increase over that time primarily reflects the benefits of higher iron ore prices.

During the month of December, the benchmark iron ore price ranged between $US130 and $US150 per tonne.

It has been even stronger in January, trading as high as $US180 per tonne, contrary to market predictions of a correction.

As a pure-play iron ore stock, Fortescue has been the biggest beneficiary of the commodity’s boom-time pricing.

Its share price has doubled over the past 12 months to $24.40, making it one of the top 5 stocks on the ASX.

Diversified miners BHP and Rio Tinto have also been big beneficiaries of the higher iron ore price, with both companies expected to report substantially higher profits.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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