Shares in Fortescue Metals Group Limited (ASX: FMG) lifted 6% today after the Pilbara-based iron ore miner handed in a full year profit of US$2.1 billion on revenues of $8.447 billion.
The profit was more than double the prior year as the group benefited from the rebound in iron ore prices on the back of strengthening demand from China. In fact iron ore prices averaged around US$69 per tonne over the financial year, which is a massive improvement on the US$51 per tonne average price over FY 2016.
The group also managed to reduce its operating cost base to mean it cost it just US$12.82 to dig up each wet metric tonne of iron ore. The total cost for the business per wet metric tonne delivered was just US$22, which includes costs such as long-haul shipping and administration.
The group will pay a final dividend of A$25 cents per share to take full year dividends to A$45 cents per share on basic earnings per share of US67 cents.
Net debt as at June 30, 2017 was US$2,663 billion, with a total of US$2.7 billion in debt repaid over the year.
The company expects to ship 170 million tonnes of iron ore over FY 2018 and will lift its dividend payout ratio to a range of 50 to 80 per cent of net profit after tax.
