Fortescue Ltd (ASX: FMG) shares are on the slide on Thursday morning.
At the time of writing, the mining giant's shares are down 1% to $18.78.
This follows the release of the company's quarterly update today.
Fortescue shares fall on quarterly update
Investors have been selling Fortescue shares despite the miner delivering a record-breaking performance in the second quarter and first half despite challenging conditions.
During the quarter, the miner shipped 49.4 million tonnes (Mt) of iron ore, bringing total shipments for the first half of the financial year to 97.1Mt.
The latter represents a 3% increase compared to the same period in FY 2024 and marks the highest half-year shipments in the company's history. Impressively, management notes that this was achieved despite wet weather in the Pilbara region.
While the majority of this came from its Hermatite Operations, Fortescue's Iron Bridge Magnetite Project made notable progress during the half. Shipments from Iron Bridge totalled 1.5Mt in the second quarter, contributing 3.2Mt for the first half of FY 2025.
During the period, the project successfully completed a major shutdown of its ore processing facility and concentrate handling facility. Efforts are now focused on ramp-up activities. This includes optimising the air classification circuit and downstream aerobelt conveyors.
Production, costs, and guidance
Total ore mined in second quarter of FY 2025 increased by 12% year-on-year to 61.9Mt, while total ore processed rose by 5% to 51.0Mt.
In respect to costs, Fortescue delivered a strong performance in the second quarter, with Hematite C1 costs dropping 10% quarter-on-quarter to US$18.24 per wet metric tonne (wmt). This reduction was driven by higher mining volumes, a lower strip ratio aligned with the mine plan, and favourable currency exchange rates.
In light of this, Fortescue's FY 2025 Hematite C1 cost guidance remains unchanged at US$18.50–US$19.75 per wmt.
Pleasingly, the miner has also reaffirmed its shipments and capital expenditure guidance. The former will see iron ore shipments of 190Mt to 200Mt including 5Mt to 9Mt from Iron Bridge.
How does this compare to expectations?
According to a note out of Goldman Sachs, it was expecting the miner to report a small quarter on quarter increase in iron ore shipments to 48.6Mt. Whereas the consensus estimate is for a larger increase to 49.4Mt for the three months.
The consensus estimate was expecting this to be achieved with a Hermatite C1 unit cost of US$19.40 per tonne.
As you can see above, the miner delivered on the market's shipments estimate and outperformed on costs.
'Outstanding operating performance'
Fortescue Metals CEO, Dino Otranto, was pleased with the company's performance. He said:
It's been an outstanding operating performance in the quarter, with iron ore shipments of 49.4 million tonnes contributing to our highest ever half year shipments of 97.1 million tonnes. We achieved this while maintaining our focus on safety, as well as driving costs lower.
Our decarbonisation plan is also making progress with a major heavy mobile equipment contract awarded to XCMG during the quarter, which will support the transition of our diesel mining fleet to zero emissions by 2030.
