Fortescue Metals (FMG) - A result below market consensus but ahead of our numbers

Fortescue shipped a total ore of 165 Mt up 33% as compared to 124Mt in pcp. Price realisations on a contractual basis were maintained at 85% or US$57/dmt, based on an average contractual price of US$67/dmt. Operating costs were reduced by 21% to US$27/wmt and capital expenditure was US$626 million including sustaining capital of US$2/wmt. There was a variance against our estimates primarily on lower than-forecast shipping costs, operating leases and royalties. Depreciation was also ~US$75m ahead of our estimate. Clearly a volatile year on both price and cost front but does not change a big step down in revenues (-26%), EBITDA (-55%), NPAT (-88%) and cut in total dividend (-75%). Read more here: (VIEW LINK)