Australian iron ore producer Fortescue has announced its financial results for fiscal year 2026. The company’s annual revenue increased by 9% to USD 17 billion, driven by higher realised prices and increased iron ore sales.
The company also achieved a record annual shipment volume of 201.3 million tonnes of iron ore during the period. Fortescue also reported annual records across its mining, ore processing and rail operations.
Adjusted EBITDA rises to USD 8.6 billion
Fortescue’s adjusted EBITDA increased by 9% year on year to USD 8.6 billion in FY2026. The adjusted EBITDA margin stood at 51%. The company stated that prices were the largest contributor to EBITDA in its Metals segment, followed by higher sales volumes. Higher operating costs, as well as R&D and administrative expenses, partially offset the increase.
Hematite C1 unit costs increased by 4% year on year to USD 18.74/tonne amid higher energy prices and continued inflationary pressures. Fortescue also stated that it had achieved approximately USD 750 million in C1 cost savings over the past two years.
Adjusted net profit reaches USD 3.5 billion
The company’s adjusted net profit (Underlying NPAT) increased by 3% year on year to USD 3.5 billion. Statutory net profit (Statutory NPAT) stood at USD 2.9 billion.
Fortescue said statutory net profit was affected by a non-cash impairment charge related to Iron Bridge and an expense associated with a compensation claim.
Free cash flow rises 25%
Fortescue generated USD 6.8 billion in operating cash flow and USD 3.2 billion in free cash flow in FY2026. Free cash flow increased by 25% compared with the previous financial year.
The company invested a total of USD 3.6 billion in capital expenditure during the year. Of this amount, USD 2.1 billion was allocated to sustaining and hub development capital expenditure, while USD 848 million was invested in decarbonisation. Sustaining and hub development expenditure decreased by approximately one-fifth year on year, while decarbonisation investments were accelerated.
Net debt stands at USD 900 million
Fortescue ended the financial year with USD 5.1 billion in cash, USD 5.9 billion in gross debt and USD 900 million in net debt. Gross debt to EBITDA stood at 0.7x, while the gross debt ratio was 23%.
During the year, the company also completed the syndication of a RMB 14.2 billion term loan facility. Fortescue said the transaction diversified its funding sources, reduced its weighted average cost of debt and extended its average debt maturity.
FY2027 shipment guidance set at 197-207 million tonnes
Fortescue expects iron ore shipments of 197-207 million tonnes in FY2027, with 11-14 million tonnes expected to come from its Iron Bridge operation.
The company also announced an additional USD 680 million investment to expand the Green Grid network in the Pilbara. The investment is expected to provide an additional 200 MW of reliable renewable energy capacity beyond Fortescue’s own operational requirements.
Fortescue’s board declared a dividend of AUD 0.46 per share, bringing the total annual dividend to AUD 1.08 per share. The dividend payout ratio stood at 65%.
Comments
No comment yet.