Fortescue Metals Group has posted a 58 per cent drop in annual profit on the back of declining prices and demand for its iron ore from China.
The world's fourth-largest iron ore miner reported a full-year net profit of $US879 million, down from $US2.09 billion a year ago and missing analyst estimates of $US1.08 billion.
Demand for Fortescue's iron ore from China has been on the decline as steelmakers look to import higher-grade, less-polluting iron ore.
In July, iron ore shipments to China from Australia's Port Hedland, which Fortescue and BHP use, fell nearly 20 per cent from a month earlier.
This has led to Fortescue realising weaker prices for its lower grade iron ore. Fortescue realised revenue of 64 per cent of the average Platts 62 CFR Index price in fiscal 2018, a per cent lower than its guidance of around 65 per cent.
Cost per wet metric tonne (wmt) came in at $US12.36 for the full-year that ended June 30, in line with previous guidance.
The miner, however, maintained its fiscal 2019 cost guidance of $US12-13 per wet metric tonne, and production guidance of 165 million to 173 million tonnes.
"A 60 per cent iron content product, named West Pilbara Fines, will be produced in the second half of financial year 2019 in advance of the development of the Eliwana mine and rail project," the company said.
The iron ore miner approved the new $US1.3 billion Eliwana iron ore mine in May.
Fortescue declared a final dividend of 12 cents per share, down from 25 cents a share a year ago.
FORTESCUE FY PROFIT SLUMPS
* Net profit $US879m vs $US2.09b
* Revenue down 18pct to $US6.89b
* Final dividend of 12 cents a share, down from 25 cents/sh
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