Owners of Fortescue Ltd (ASX: FMG) shares may be excitedly waiting for their ASX mining share to report the result for the first half of FY25. Given all the changes that have happened in the last 12 months, it could be a very interesting report.
The iron ore price has fallen significantly (from US$130 per tonne to US$107 per tonne, according to Trading Economics), the new US administration is more hostile to China, and the excitement about green energy seems to have reduced. Where does this leave Fortescue? We'll soon find out.
Let's look at what we already know.
Operational update
When Fortescue informs investors about its quarterly operational performance, it also provides a few figures that provide insights into the result.
The business achieved 97.1mt of iron ore shipments in the first half of FY25, with 49.4mt in the second quarter and 47.7mt in the first quarter. It was the highest half-year shipments in Fortescue's history.
It achieved hematite (iron ore) average revenue of US$87 per tonne in the second quarter and US$83 per tonne in the first quarter.
Fortescue has also already told us that on 31 December 2024, it had a net debt balance of US$2 billion, including a cash balance of US$3.4 billion and a gross debt of US$5.4 billion. Total capital expenditure and investments for the first half of FY25 were US$1.8 billion.
The hematite C1 cost (production costs) were US$18.24 per tonne in the second quarter and US$20.16 per tonne in the first quarter.
There are some useful underlying indications of what Fortescue may report.
In terms of green energy, the latest that Fortescue shareowners have heard is that feasibility studies and planning approvals continue to progress in the Holmaneset project in Norway and the Pecem project in Brazil.
How big could the dividend for Fortescue shareowners be?
The broker UBS recently said in a note after seeing the FY25 second quarter that it was reducing its Fortescue dividend expectations by 4% to 52 Australian cents for the half-year and "expect this to be in focus given the net debt and capex".
In other words, Fortescue is spending heavily on capital expenditure, and its balance sheet is in a net debt position, so the dividend may not be large this year.
Outlook for FY25
UBS explained what could be a key factor for the business in the near term:
Macro: US trade and tariff policy will be critical to global economic growth and the commodity price outlook. Similarly, China's outlook, and response to US trade-tariff policies, will also be key near term.
In FY25, UBS projects Fortescue could generate US$15.5 billion in revenue, US$3.6 billion in net profit, and pay an annual dividend per share of A$1.05.
Fortescue shares snapshot
In the past 12 months, the Fortescue share price has fallen close to 30%.
