Fortescue’s first quarter record but shipments down on prior period, no energy division breakthrough

Andrew Forrest’s Fortescue has failed to carry the momentum from a strong finish to last financial year through to the first quarter of FY25, with shipments down sharply.

The Pilbara iron ore major on Thursday reported it shipped 47.7 million tonnes of the steel-making commodity in the three months to the end of September — up 4 per cent from a year earlier but down 11 per cent from the previous quarter.

Fortescue has taken some solace from the decline, noting it was a record for a first quarter. The milestone was aided by a 1.6mt contribution from its trouble-plagued Iron Bridge magnetite project.

Analysts at Citi said Fortescue’s first-quarter shipments were in line with expectations but investors had marked its stock down 4 per cent in the fist hour or trade to $18.98.

But costs to produce a wet tonne of regular hematite ore soared 12 per cent over the quarter to $US20.16, which Fortescue pinned on a higher strip ratio and inflationary pressure.

Fortescue Metals chief executive Dino Otranto said a strong operating performance at the start of the year had put the miner on track to meet full-year guidance of between 190mt and 200mt, including between 5mt and 9mt from Iron Bridge..

Investors hoping for signs of a revenue breakthrough at Fortescue’s laggard renewable energy division were left disappointed, with its chief executive Mark Hutchinson reporting only that it continued “to progress our green energy projects globally in a disciplined manner as we wait for the appropriate policy settings to support the market development”.

Fortescue is pursing four green hydrogen projects in Australia, the US, Norway and Brazil.

Underlying earnings for Fortescue Energy were in the red to the tune of $970m at the end of last financial year. It lost $909m in FY2023.

Costs will jump further during the current financial year with the “net operating expenditure” and capital expenditure set to reach a combined figure of about $US1.2b.

Fortescue held $US3.4 billion cash at the end of September compared to $US4.9b at the end of June after it paid out $US1.9b in dividends and capital expenditure and investments of $US780 million.

Debt stood at $5.5b