Annual profit at Fortescue Metals Group, the world’s fourth-largest iron ore miner, took a hit as iron ore prices are pressured due to persistent worries over demand from top steel producer China. Its margins were further crimped by rising costs and a labour shortages.
As a result, the Perth-based miner earned average revenue per dry metric tonne (dmt) of iron ore of $99.80 during the year, down from $135.32/dmt for the previous year, when the miner saw record earnings.
Also underpinning the drop in profit was the shortage of skilled labour in the aftermath of the COVID-19 pandemic, which has raised personnel costs across Australia’s mining sector.
Fortescue, which is about 37%-owned by billionaire Andrew Forrest, reported annual underlying net profit after tax of $6.20 billion, down from a record $10.35 billion a year ago. It was largely in line with a Refinitiv estimate of $6.24 billion.
The miner declared a final dividend of A$1.21 per share, down from A$2.11 apiece declared last year.
The bleak earnings report comes weeks after rival Rio Tinto (NYSE:RIO)’s earnings and dividend also suffered a blow from iron ore prices retreating from 2021 highs due to worries that demand from top consumer China will slow down.
