Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Fortescue (ASX:FMG) share price rises as production grows in Q1

The Fortescue Metals Group Limited (ASX: FMG) share price is up around 1% after delivering its FY23 first quarter update.

Fortescue’s FY23 first quarter

The business has already told investors about some of the things that happened during the last few months such as its multi-billion decarbonisation plan and its plan to invest in a green hydrogen import terminal in Europe.

In this article I’m going to focus on the mining side of the business.

It said that iron ore shipments for the quarter were 47.5 million tonnes (mt), which was 4% higher than the prior comparable period and a record for a first quarter.

Average revenue for the quarter was US$87 per dry metric tonne (dmt), which was 85% of the average Platts 62% CFR Index. That measure shows how much of a discount there was for Fortescue’s lower grade iron ore.

The C1 costs, the mining-related costs of the business, were US$17.69 per wet metric tonne (wmt). This was 3% higher than the previous quarter. It said it’s focused on mitigating industry-wide cost pressures, including fuel costs.

Fortescue said that it had US$3.3 billion cash at 30 September 2022, though it had a net debt position of US$2.8 billion at the end of the quarter (which means it has a few billion more debt than cash).

FY23 guidance was unchanged. Iron ore shipments are expected to be between 187mt to 192mt, with approximately 1mt from Iron Bridge. C1 costs are expected to be between US$18 per wmt to US$18.75 per wmt in this financial year. These are key statistics that can impact the Fortescue share price, aside from the iron ore price.

Management comments

The Fortescue executive Chair Andrew Forrest said:

Fortescue is leading the green energy transition and setting record-breaking industry benchmarks. We are establishing the building blocks of a new, global renewable energy value chain spanning technology, manufacturing, green energy generation and distribution which will deliver significant returns to our shareholders.

Last month at the United Nations General Assembly, Fortescue announced it would step beyond
fossil fuels and lead heavy industry to achieve real zero emissions (Scope 1 and 2) across our iron ore operations by 2030. We will save an estimated US$3 billion by 2030 as a result, rising to annual
savings of US$818 million once fully implemented. Our roadmap outlines the technology, timetable,
strategy and costings required to decarbonise profitably, avoid financial, commercial,
environmental and social risk, and future-proof the business. We urge other emitters like us to

Final thoughts on the Fortescue share price

Fortescue’s production continues to be impressive. Compared to the guided costs, the costs it reported were largely what were expected. I’m not really surprised to see that the share price is up a little today.

I’m impressed by the progress that Fortescue is making with its green hydrogen efforts. Investing in an green hydrogen import terminal seems like a smart move.

Hopefully Fortescue can get its green hydrogen operations up and running as soon as possible, to help diversify earnings and bring the other benefits that green hydrogen will bring to the world.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz owns shares of Fortescue.
Skip to content