While the Fortescue Ltd (ASX: FMG) share price has reacted negatively to the FY25 result, shareholders at least know they'll soon receive a sizeable dividend from Fortescue.
The miner's financials didn't make for positive reading. Revenue fell 15% to US$15.5 billion, underlying operating profit (EBITDA) dropped 26% to US$7.9 billion, and underlying earnings per share (EPS) in Australian dollar terms declined 40% to $1.69.
Seeing as Fortescue's dividend is largely decided based on a dividend payout ratio (of profit), this result was likely to lead to a decline in the payout.
Let's take a look at what happened to Fortescue's dividend.
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Fortescue dividend declared
The ASX mining share decided to declare a final dividend of AU 60 cents per share, representing a 33% decline year over year.
Added to the interim dividend from the FY25 half-year result, Fortescue's full-year dividend came to A$1.10 per share, a decline of 44%.
As astute readers may have noticed, the dividend decline represented a larger fall than the drop in Australian dollar EPS. That's because the Fortescue dividend payout ratio was reduced from 70% in FY24 to 65% in FY25, a reduction of five percentage points.
Fortescue's profit decline was the key impact, but it's also being considered with its balance sheet. The FY25 result saw net debt rise 124% to US$1.1 billion – total debt was the same at US$5.4 billion, though cash on the balance sheet declined by 12% to US$4.3 billion. The company's free cash flow fell 50% to US$2.55 billion as it ramped up investing activities by 39% to US$3.9 billion.
When is the ASX mining share's payout hitting bank accounts?
The first date investors need to know about is the ex-dividend date. This is the date that investors need to own Fortescue shares before if they want entitlement to the payout.
Fortescue's ex-dividend date is 1 September, so investors only have this week to invest if they want the dividend. That means Friday, 29 August, is the last day to buy Fortescue shares.
The payment date for the Fortescue dividend is 26 September, so shareholders only have to wait one month until the payment arrives in their bank accounts.
Investors can also choose to receive new Fortescue shares rather than cash by taking part in the dividend reinvestment plan (DRP). They need to make that election by 5pm on 3 September if they would prefer the DRP.
Fortescue dividend yield
At the current Fortescue share price, the FY25 final dividend translates into a fully franked dividend yield of approximately 3% and a grossed-up dividend yield of 4.4%, including franking credits.
The full-year dividend represents a fully franked dividend yield of 5.6% and a grossed-up dividend yield of 8%, including franking credits. Time will tell what the FY26 dividend yield comes to.
