Fortescue mines money

I obviously have my doubts about the long term but Fortescue is doing all the right things in the short. Today’s full year result included:

revenue of US$8.12 billion

EBIT 2.76 billion

NPAT $1746mn) just below consensus $1771mn

no new abnormals

dividend 10¢ps fully franked

backing away from the TPI sales

net cash as of 30 June was previously announced as $9.9bn

FY14 guidance: US$36-38/wmt for FY14 and 127-133Mt shipments.

no MRRT

This equates to a break even price somewhere around $80. For now, FMG is mining cash. Shares are up $4.25, threatening to break out to a new high for the move. We might see broker upgrades too.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.