Fortescue’s (FMG) record profit, shares lower
Stock
Fortescue Metals (FMG) $7.28 as at 26/08/2019
Event
The stock is trading down this morning despite an impressive result scorecard for FY19. Fortescue managed a record profit of $US3.2b thanks to the iron ore price tailwind seen in the second half of the year, topping up its total dividend to $AU1.14 – to put this in context, FMG was trading below $1.50 for a period in 2016.
Their outlook remained unchanged, with Fortescue maintaining 170-175mt in shipment expectations, and costs to be in the range of $US13.25-13.75/wmt. This is a reasonable jump in costs vs the FY19 average of $US13.11/wmt and reflects the general rising costs theme in the resource space seen by many of Fortescues peers.
Today’s fall comes as a result of further market volatility, with Donald Trump throwing global growth prospects into disarray with the escalating trade tensions. Fortescue, as with other commodity plays, is highly leveraged to these trends.
Fortescue Metals (FMG) Chart
Market Matters Take/Outlook
