Australia’s Fortescue Metals Group posted its smallest full-year profit in six years, reporting an attributable net profit after tax of A$3.37 billion for the year ended June 30, down from A$5.68 billion a year earlier and largely in line with analyst expectations of A$3.43 billion.
The miner also lowered its dividend payout, declaring a final dividend of A$0.60 per share, bringing the full-year dividend to A$1.10 per share and maintaining a payout ratio of 65%, the lowest since 2018.
The decline mirrors broader pressures in the iron ore market, with prices for the steel-making commodity softening and miners prioritizing cash retention for growth. Fortescue’s shares fell 2.1% following the announcement, reflecting investor caution.
In response, Fortescue has refocused on its core iron ore operations while recalibrating its green hydrogen ambitions. The company has delayed its trial production plant for “green iron” — a process replacing coal with hydrogen to produce steel — to 2026, rather than the previously planned rollout this year. The plant is expected to initially produce 1,500 tonnes to supply environmentally-conscious customers in China.
Dino Otranto, CEO of Fortescue’s metals division, highlighted the need for investment in common power infrastructure to reduce energy costs, noting increasing competition from regions such as Saudi Arabia seeking to enter the green steel market.
While Fortescue advances its green iron strategy, major rivals Rio Tinto and BHP have expressed skepticism about Australia’s ability to develop a competitive green iron sector, citing insufficient economic incentives.
Fortescue’s recent adjustments follow a broader reevaluation of its green hydrogen portfolio. The company recently terminated two projects in Arizona and Australia, citing underdeveloped customer bases. Nevertheless, CEO of Green Energy and Growth Gus Pichot reaffirmed the company’s commitment to green hydrogen, signaling continued investment in renewable steel production over the medium term.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
