Fortescue Metals Group Ltd Is Trading At Its 2 Years' High Level

  • Mar 19, 2019 AEDT
  • Team Kalkine
Fortescue Metals Group Ltd Is Trading At Its 2 Years' High Level

Global iron ore miner, Fortescue Metals Group Ltd (ASX: FMG) is responsible for constructing some of the most significant mines in the world. Founded in 2003, the company has now established itself as one of the largest global iron ore producers in the world.

At a price of $6.820, the company’s shares are trading at its 2 years' high level today. In the last one year, the company has witnessed an increase of 46.31% in its share price as on 18 March 2019. 

In December quarter, the company delivered strong results which demonstrated the company’s ability to generate strong cash flows by successfully executing its product strategy. The company reported total shipments of 42.5 million tonnes (mt) in the December quarter which brought the total for the first half of FY19 to 82.7mt.

On 16 December 2018, the company shipped its first cargo of 60.1% iron grade West Pilbara Fines product to China. The company is now expecting to deliver between 8-10mt of this product in FY 2019. The company has received excellent feedback from customers for its product and now it is planning to supply 40mpta of West Pilbara Fines from December 2020.

In the first half of FY 2019, the company reported a net profit after tax of US$644 Mn and underlying EBITDA of US$1.6 Bn. The underlying EBITDA was 21% higher than the second half of 2018. For the half-year period, the company reported an average realized price of US$47/dmt, demonstrating the successful execution of the company’s integrated operations and marketing strategy. The underlying EBITDA margin increased by 24% to US$21/dmt as compared to the second half of 2018.

The half-year results reflect the impact of improved price realizations, consistent operational performance and ongoing productivity and efficiency initiatives to deliver strong financial results.

During the half year period, the company’s Revolving Credit Facility (RCF) was increased by US$500 Mn to US$1,025 Mn and extended by 12 months to July 2021. As at 31 December 2018 the RCF was undrawn, providing short term liquidity to support growth and development.

On 20 February 2019, the company announced a fully franked interim dividend of A$0.19 per share and a fully franked special dividend of A$0.11 per share with a record date of 1 March 2019 and a payment date of 22 March 2019.  The interim dividend of A$0.19 per share is representing a 65% pay-out ratio of 1H19, historically the company's interim dividend pay-out ratio has been around 40%.

The allocation price for shares to be issued to participants in the Dividend Reinvestment Plan (the Plan) for the 2019 interim and special dividend is $6.5028.

FMG’s shares last traded at $6.820 with a market capitalization of circa $21.03 billion as on 19 March 2019. It has 52 weeks high of $6.960 and 52 weeks low of $3.455 with an average volume of ~19,564,463.


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