Fortescue Ltd (ASX: FMG) shares are on the slide on Thursday.
In morning trade, the iron ore giant's shares are down almost 2% to $19.42.
This follows the release of the miner's quarterly update.
Fortescue shares fall on quarterly update
For the three months ended 30 September, Fortescue achieved total iron ore shipments of 47.7 million tonnes (Mt). This includes 1.6Mt from Iron Bridge, which was higher than the operation achieved during the whole of FY 2024.
Fortescue's total iron ore shipments of 47.7Mt were a record for the first quarter and represent a 4% increase over the prior corresponding period. However, this was down a sizeable 12% from 53.5Mt during the previous quarter and is a touch short of the consensus estimate of 47.8Mt.
Also heading in the wrong direction during the quarter was Fortescue's hematite C1 costs.
The mining giant reported C1 costs of US$20.16 per wet metric tonne (wmt), which is up 9% quarter on quarter and 12% year on year.
Once again, this has missed the market's expectations for the quarter. The consensus estimate was for C1 costs of US$19.20 per wmt.
Fortescue's average hematite revenue was US$82.96 per dry metric tonne for the quarter. This represents a realisation of 83% of the average Platts 62% CFR Index.
Finally, at the end of the period, Fortescue had a cash balance of US$3.4 billion. This is down from US$4.9 billion a the end of June. Cash outflows during the quarter included the payment of the FY 2024 final dividend of US$1.9 billion and capital expenditure and investments of US$780 million.
Management commentary
Fortescue Metals CEO, Dino Otranto, was pleased with the company's start to FY 2025. He said:
Fortescue had a strong start to FY25 with record first quarter iron ore shipments of 47.7Mt, which included 1.6Mt from Iron Bridge. This was achieved while maintaining our focus on safety with a Group TRIFR of 1.2.
This strong operating performance means we are on track to meet our FY25 market guidance. We also celebrated a number of other milestones including the commencement of works at our Green Metal Project at Christmas Creek which marks a pivotal moment in our journey to build a green metal supply chain.
FY 2025 guidance
Fortescue is guiding to full year iron ore shipments of 190Mt to 200Mt. This includes shipments of 5Mt to 9Mt for Iron Bridge.
This is expected to be achieved with a C1 cost for Hematite of US$18.50 to US$19.75 per wmt.
Management expects Fortescue Metals capital expenditure of US$3.2 billion to US$3.8 billion. Whereas Fortescue Energy's net operating expenditure is forecast to be US$700 million and its capital expenditure is expected to be US$500 million.
