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Australian Times


Fortescue Profit Gains Despite Analysts Expectations

August 22, 2013 by rochelle in Business with 0 Comments

Debunking what analysts have earlier projected, Fortescue Metal Group has exceeded expectations and reported that the company has earned a profit of US $1.74 Billion.

Analysts earlier said that the company may earn a net profit of $US1.56 Billion, net of tax, which made Fortescue pay a divided a 10% to its shareholders.

The company is also planning on retaining the option of selling down their stakes if they receive a good offer, despite reports and rumours that they have completely scrapped this plan. Offers have been fielded, but so far, its executives have not yet found a deal with considerable value to their market.

Following these developments, Fortescue’s shares dropped to 3%, even with the price of iron ore holding steady.

The stocks of the company, however, increased to 4% or at $4.28 during the trade in the middle of the day.

Fortescue executive Nev Power said that the price of iron ore had a huge impact in its profits for 2012-2013 financial year. But because of exports done in larger volumes, its loss was offset.

Price of iron fell dropped an average price to 13%, but revenue in total was up by 21%. Even Fortescue is surprised as such result was not likely to happen eleven months ago, when iron ore dragged the company into a debt crisis. A company restructure and spreading debt payments over a longer time period allowed the company to bounce back.

Steve Pearce, the company’s CFO, said that even with this strong results, it will be Fortecue’s best interest to practice discipline with its operation in the next few years.

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