The Fortescue share price smashed the ASX 200 in April

Let's dig into why the miner beat the index.

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A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.

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The Fortescue Ltd (ASX: FMG) share price had a good month in April compared to the S&P/ASX 200 Index (ASX: XJO). Fortescue shares rose by 1.4% while the index dropped 2.9%.

As we can see on the chart above, Fortescue shares have seen a lot of volatility over the past year, but on the whole, they have risen over the past 12 months.

What happened in April?

The main headline for Fortescue was the release of the quarterly production report for the three months to March 2024. It included a record month and ongoing progress for its green energy efforts.

The ASX iron ore share reported iron ore shipments of 43.3 million tonnes in the FY24 third quarter, which was 6% lower year over year, which was impacted by the ore car derailment on 30 December 2023 and weather disruptions.

While the third quarter started off with disruption, shipments recovered during the quarter, with a record month for shipments of 18.7mt achieved in March 2024.

It achieved average revenue of US$104 per dry metric tonne (dmt) for the Pilbara hematite (its usual iron ore), while the Iron Bridge concentrate achieved revenue of US$145 per dmt for the quarter.

There were also some positives related to the green energy and decarbonisation efforts.

Fortescue said it successfully conducted the world's first use of ammonia as a marine fuel onboard a ship called the Fortescue Green Pioneer.

In April 2024, it announced a joint venture with OCP Group, the world leader in plant nutrition solutions and phosphate-based fertilisers, which aims to supply green hydrogen, ammonia and fertilisers to Morocco and international markets.

It also officially opened the Gladstone electrolyser facility in Queensland, with a manufacturing capacity of over 2GW per year.

Guidance for FY24 total shipments is unchanged at 192mt to 197mt, despite the derailment, but shipments are expected to be at the lower end of the range.

Fortescue Metals Chief Executive Officer, Dino Otranto said:

Our decarbonisation plan is progressing well, with our first operational electric excavator moving over one million tonnes of material since being commissioned. Our battery electric haul truck prototype has completed its first phase of testing, exceeding the performance expectations of the battery power system.

The company also said FY24 Fortescue energy net operating expenditure guidance was reduced by US$100 million to US$700 million, reflecting cost-saving initiatives.

The company's cash balance ended the quarter at US$4.1 billion, with net debt of US$1.2 billion at 31 March 2024, after payment of the interim dividend of US$2.2 billion and capital expenditure of US$589 million.

Fortescue share price snapshot

The iron ore price was above US$140 per tonne at the start of the year but has now dropped to around US$118 per tonne. That's largely why the Fortescue share price has declined in the year to date.

Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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