24/08/2020 - 10:00

Fortescue posts record profit

24/08/2020 - 10:00

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Fortescue Metals Group has substantially increased its final dividend after posting a record annual profit, with company founder and chairman Andrew Forrest getting nearly $2 billion in dividends.

Fortescue posts record profit
Elizabeth Gaines says Fortescue's "unique differentiated culture" has underpinned its full-year performance. Photo: Gabriel Oliveira

Fortescue Metals Group has substantially increased its final dividend after posting a record annual profit, with company founder and chairman Andrew Forrest getting nearly $2 billion in dividends.

The iron ore miner's net profit increased to $US4.7 billion ($A6.6 billion) for the year to June 2020.

Fortescue will pay a final dividend of $1 a share, taking the total dividends for the year to $1.76 – representing a payout of $US3.7 billion ($A5.2 billion) for the year.

Mr Forrest holds just more than 36 per cent of the company's shares, meanig his full-year dividend will be $1.95 billion.

The group, which is the world's fourth-biggest iron ore miner, said the 49 per cent lift in profit for 2019-20 was driven by record shipments and ongoing low costs that underpinned revenue of $US12.8 billion ($A17.9 billion).

Iron ore shipments rose six per cent to 178.2 million tonnes in the financial year, realising an average price of $US79 per dry metric tonne which is 21 per cent higher.

It has forecast iron ore shipments at around the same level (175mt-180mt) in the current financial year.

Chief executive Elizabeth Gaines said Fortescue's unique differentiated culture underpinned its full-year performance.

"Leveraging the capability in our value chain resulted in record shipments, sustained low cost performance and excellent operating margins, which positioned us to deliver record NPAT of $US4.7 billion," she said.

"We are proud to have achieved the number one ranking in the S&P/ASX100 Index for total shareholder returns over the three years to June 30 2020 of 266 per cent," she added.

The company also said it had revised its climate change target and now aimed to achieve net zero emissions by 2040.

This includes a 26 per cent reduction in emissions from existing operations from 2020 levels by 2030.

Shares in Fortescue were up 3.6 per cent to trade at a new all-time high of $18.64.

That valued Mr Forrest's stake at just under $20 billion.

Fortescue’s strong profit results and higher share price translated to increased incomes for the company’s key executives.

Ms Gaines had total ‘statutory’ remuneration of $6.1 million, up from $5 million in the prior year.

Her remuneration comprised a cash salary of $1.85 million plus various share-based bonuses.

The company also disclosed Ms Gaines ‘actual’ remuneration was $9.9 million.

The big gap between the two measures reflected different ways of calculating share-based payments.

Greg Lilleyman had statutory remuneration of $3.8 million, while Julie Shuttleworth and finance boss Ian Wells both earned $2.5 million.

Mr Forrest elected to forego his director fees while deputy chair Mark Barnaba was paid $637,000 in director fees and committee fees.

 

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