Fortescue Delivers US$3.4B Profit, Sets Sights on Green Energy Growth

Robust Financial Performance Amid Market Headwinds

Fortescue Metals Group has reported a net profit after tax of US$3.4 billion for the fiscal year ending June 2025, marking a 41% decline from the previous year. This drop primarily reflects a 15% decrease in revenue to US$15.5 billion, driven by an 18% fall in average iron ore prices. Despite this, the company achieved record iron ore shipments of 198.4 million tonnes, underscoring operational resilience and supply chain excellence.

Cost discipline remained a hallmark of Fortescue’s performance, with Hematite C1 costs marginally reduced to US$17.99 per wet metric tonne. The underlying EBITDA margin stood at a healthy 51%, reflecting efficient operations even in a challenging pricing environment.

Strong Balance Sheet and Shareholder Returns

Fortescue’s balance sheet remains robust, with cash reserves of US$4.3 billion and net debt of US$1.1 billion, maintaining a conservative gross gearing ratio of 21%. The company successfully secured a Renminbi syndicated term loan facility at a record low fixed interest rate of 3.8%, highlighting strong investor confidence and cost-effective capital management.

In line with its commitment to shareholders, Fortescue declared a fully franked final dividend of A$0.60 per share, bringing total dividends for FY25 to A$1.10 per share. This represents a 65% payout ratio of net profit after tax, consistent with the company’s dividend policy and signaling steady returns despite market volatility.

Decarbonisation and Green Energy Initiatives Gain Momentum

Fortescue is accelerating its transition towards sustainability with notable progress in decarbonisation. The 100MW solar farm at North Star Junction is now operational, supplying about a quarter of the site’s electricity needs. Additionally, the company has deployed electric excavators and drills, and is expanding its renewable energy network through Pilbara Energy Connect, which includes over 640km of transmission lines.

Leadership changes reflect this strategic pivot, with Gus Pichot appointed as CEO Growth and Energy to spearhead green energy development. Fortescue’s Green Metal Project is underway, aiming to produce green iron using green hydrogen, positioning the company at the forefront of the mining sector’s energy transition.

Strategic Expansion and Future Outlook

Fortescue’s acquisition of Red Hawk Mining Limited for A$254 million, including the Blacksmith Iron Ore Project, integrates new assets into its Life of Mine plan, supporting long-term growth. The company’s FY26 guidance anticipates iron ore shipments between 195 and 205 million tonnes, with C1 costs expected to remain stable between US$17.50 and US$18.50 per wet metric tonne.

Capital expenditure is forecasted between US$3.6 billion and US$4.3 billion, focusing heavily on sustaining operations, decarbonisation efforts, and exploration. This disciplined investment approach aims to balance operational excellence with innovation and sustainability.