‘Twiggy’ Forrest collects $698m as Fortescue profits surge

Australian mining giant Fortescue Metals Group has more than tripled its half-year profit, beating market expectations, on the back of a surge in the price of steelmaking raw material iron ore and a record number shipments.

The bumper profit which soared 280 per cent to $US2.4 billion ($3.6 billion) for the six months to December 31 delivered a dividend windfall of $698 million to mining magnate and philanthropist Andrew "Twiggy" Forrest, Fortescue's biggest shareholder.

Fortescue chairman Andrew Forrest owns a 35 per cent stake in the company.Credit:Bloomberg

On the back of Chinese steelmakers' elevated demand for Western Australian iron ore, Fortescue's first-half shipments rose 7 per cent from the same time the previous year to reach a record high of 88.6 million tonnes, the company said.

The company said shareholders would receive a 76¢ dividend, below analyst consensus of 89¢.

BHP, the world's biggest miner, on Tuesday also revealed a lower-than-expected dividend, which analysts noted was due to a "cautious approach" in light of the near-term volatility posed by the coronavirus outbreak.

Fortescue and its fellow mining heavyweights have been keeping close watch on the fast-moving coronavirus epidemic in China, the world's biggest consumer of iron ore, as fears about the disruption rock global commodities markets. While factories and shipping ports are locked down across the country, Australian exporters have been in talks with customers to delay shipments in order to avoid declarations of "force majeure" on contracts.

Fortescue is eyeing record iron ore shipments for the 2020 financial year.Credit:Reuters

Last month, Fortescue chief executive Elizabeth Gaines said has not yet curtailed any of its iron ore shipments but says it is keeping a close watch on an "evolving situation". She said Fortescue's first deliveries scheduled later this month to the Hubei province, which was affected by port lockdowns.

Iron ore prices in 2019 surged nearly 60 per cent, with the benchmark price hitting about $US120 a tonne on the back of strong demand and a global supply outage caused by a mine dam collapse in Brazil. But the prices have since returned to about $US90 as supply normalises and China's economy slows.

With a 35 per cent stake in the company he founded, Mr Forrest last year earned $1.24 billion from Fortescue's full-year dividend. Dividends from his holding help fund his philanthropic organisation, Minderoo Foundation.

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