Fortescue Posts 41% Profit Drop Amid Weak Iron-Ore Prices but Eyes Green Energy Growth
Fortescue FY25 Profit Falls 41% as Iron-Ore Prices Drop; Green Iron Projects Gain Momentum
Fortescue Metals, the Australian iron-ore and green energy company, reported a 41% decline in full-year profit as weaker iron-ore prices weighed on revenue, though record shipments and disciplined cost management helped soften the impact.
The company posted a net profit after tax of $3.4 billion for the year ending June 30, down from $5.7 billion a year earlier.
Revenue fell 15% to $15.5 billion, driven by an 18% drop in the average realized price for hematite ore to $84.79 per tonne.
Fortescue declared a fully franked final dividend of A$0.60 per share, bringing total dividends for FY25 to A$1.10 per share, representing 65% of net profit, compared with A$1.97 the previous year.
CEO of Metals and Operations Dino Otranto said operational efficiency underpinned the results. “As the industry’s lowest-cost producer, we have delivered record shipments, disciplined costs, solid earnings, and a continued focus on safety,” Otranto said.
He also highlighted growing ties with China, noting the Australian Prime Minister’s recent visit as “a strong signal for strengthening relationships in key markets,” supported by Fortescue’s RMB term loan facility with Chinese institutions.
Underlying EBITDA fell 26% to $7.9 billion, with an EBITDA margin of 51%. Free cash flow dropped to $2.6 billion following $3.9 billion in capital spending, including decarbonization projects and the $254 million acquisition of Red Hawk Mining.
CEO of Growth and Energy Gus Pichot emphasized the company’s shift toward future-facing initiatives. “We are refining our growth strategy to focus on metals, critical minerals, energy, and technology, while exploring innovative ways to extend the life of our iron-ore assets through decarbonization and green technologies,” he said.
Construction of a green iron pilot plant in the Pilbara is underway and is expected to begin production using green hydrogen, signaling Fortescue’s commitment to sustainable iron production.
For 2026, Fortescue expects iron-ore shipments of 195–205 million tonnes at C1 costs of $17.50–$18.50 per tonne, maintaining its position as one of the world’s lowest-cost iron-ore producers.
