FMG -5.06%: A fairly tough session for Fortescue today as they announced a mixed FY23 result and surprise departure of CEO Fiona Hick after only 6 months in the job. Underlying revenue of US$16.9bn was smack inline with expectations however profitability was a slight miss, with underlying net profit after tax (NPAT) of US$5.5bn vs consensus US$5.7bn. The dividend of $1.00 was also below the $1.05 expected. Higher costs to blame for the miss at the profit line while there was plenty of focus around the departure of the CEO, the 10th Senior exec departure in the past 3-years. The current COO Dino Otranto appointed as new CEO. Operationally, they updated their forecasts for Iron Bridge life of mine C1 cost to US$45/wmt versus expectations of sub US$40/wmt while they also wrote the asset down by $726m post tax, partly due to higher discount rates.
- A tougher result for FMG, costs again an issue which has been a sector wide theme this reporting period, while stability in management is now very important.
MM is neutral FMG given multiple near term challenges
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