The Fortescue Ltd (ASX: FMG) share price is under the spotlight after reporting its FY25 result.
Fortescue is one of the world’s largest iron ore miners. It also has a green energy and decarbonisation segment.
Fortescue FY25 result
Here are some of highlights from the result for the 12 months to 30 June 2025:
- Revenue fell 15% to US$15.5 billion
- Underlying EBITDA (EBITDA explained) fell 26% to US$7.9 billion
- Net profit declined 41% to $3.37 billion
- Operating cashflow down 18% to US$6.5 billion
- Free cashflow fell 50% to US$2.5 billion
- Final dividend per share down 33% to A$0.60 per share
- Total dividend per share down 44% to A$1.10
A key driver of the result was the 18% decline in the average revenue per dry metric tonne (dmt) of iron ore (hematite) to US$84.79.
It was pleasing that it managed to reduce its C1 cost of iron ore (hematite) by 1% to US$17.99 per wet metric tonne (wmt), but it wasn’t enough to offset the pain of the iron ore drop. Fortescue said it was a strong operational performance.
Fortescue can’t control what happens with the iron ore price, but it is exposed to fluctuations in iron ore demand. Significantly less revenue for the same tonne of iron (and similar costs to produce it) unavoidably leads to a fall in profitability.
But, the company claimed to be the industry’s lowest-cost producer, with record shipments and a disciplined cost performance.
The annual dividend per share represented a 65% payout of net profit after tax (NPAT). The miner noted that the net debt increased by just over $600 million to $1.1 billion because of a reduction of its cash balance.
Green progress
The company said that green energy and green hydrogen remain key to its future, including its green iron ore strategy.
Construction of its green metal project in the Pilbara is underway and the pilot plant will soon begin producing green iron using green hydrogen.
It also said it has made strong progress on decarbonising its operations, including the continued construction of its power network in the Pilbara, with a 100MW solar farm now operational and another 190MW under construction.
Fortescue noted it continues to pursue “global opportunities in metals, critical minerals, energy and technology.”
Outlook for the Fortescue share price
The business is guiding FY26 iron ore shipments could be between 195mt to 205mt, including between 10mt to 12mt for Iron Bridge. The mid-point of this guidance would represent an increase of around 1%.
The C1 cost is predicting to be between US$17.50 to US$18.50 per wmt. The mid-point of this guidance implies roughly the same production costs.
Overall, I’d say Fortescue share investors can be happy with how the miner’s share price has risen around 30% in the last two months. But, it seems dependent on a higher iron ore price to make a sizeable improvement of profit in FY26.
It doesn’t seem like this is the best time to invest in Fortescue shares, in my view, as it’s a cyclical company. There are other ASX dividend shares I’d buy first.
