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The slump in net income to $1.55 billion for the six months to December came despite the company reaching its highest-ever shipments of iron ore for a half-year of 97.1 million tons. Fortescue sliced its dividend by more than half to A$0.50 cents a share, it said in statement Thursday.
Shares of Fortescue fell as much as 7% in Sydney after the announcement.
Fortescue, helmed by billionaire and Chairman Andrew Forrest, last year backtracked on plans to become a green-energy powerhouse and remains less diversified in other commodities than its peers. That’s put the Perth-based miner in the spotlight as China’s steel demand plateaus and iron ore prices stagnate.
Iron Bridge, Fortescue’s major iron ore growth project, is ramping up but still production remains short of its expected full capacity. The high-grade ore from that mine is marketed at a premium to its other products.
Fortescue said Thursday it is aiming to ship up to 9 million tons of Iron Bridge ore over the current fiscal year and was reviewing the schedule to get to full annual production of 22 million tons. Total iron ore shipments from all of the miner’s Pilbara operations are expected to be between 190-200 million tons for the period.
Earlier this month, Fortescue announced plans to buy Red Hawk Mining Ltd. to gain access to an undeveloped iron ore mine near its major Solomon project in Western Australia.
Fortescue’s result comes just hours after Rio Tinto Group became the latest mining major to post a slide in profit as the industry grapples with weaker demand from its top customer China. Rio posted an annual underlying profit of $10.9 billion, 7.6% lower than a year earlier.
The election of a second Trump administration has cast doubts over the future of the Inflation Reduction Act, which will further hinder plans for green hydrogen projects, Fortescue said Thursday. Prices of iron ore fell 5% in its reporting period.