Company Reports

Fortescue's adjusted fiscal 2026 net profit after tax of USD 3.5 billion (USD 1.12 per share) is tad up on year, with higher realized prices partially offset by increased unit cash costs on broadly flat volumes. Final dividend of AUD 46 cents per share brings total dividend to AUD 1.08, down 2%.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the second half of the cost curve, at around the 75th percentile. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 61% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the then 62% benchmark.

Fortescue's fiscal fourth-quarter shipments of 52 million metric tons are down 5% from the prior fourth quarter, but shipments for the year are up 1%. Cost inflation and lower volumes meant unit cash costs rose 19% in the quarter, to USD 19.40 per metric ton, while problems at Iron Bridge persist.

The iron ore price continues to trade in a narrow range, with spot of around USD 100 per metric ton flat on a quarter ago as Chinese imports remain strong despite falling steel production. The copper price is also broadly unchanged, trading around USD 6 per pound, near historical highs.

Fortescue's fiscal third-quarter shipments of 48 million metric tons are up 5% on a year ago, but 4% lower than the previous quarter. However, due to cost inflation and unfavorable foreign exchange movements, unit cash costs rose 4% on the same quarter last year, to USD 18.30 per metric ton.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the second half of the cost curve, at around the 75th percentile. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 61% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the then 62% benchmark.

The iron ore price is broadly flat compared with last quarter. While China's steel production in the first quarter of 2026 is down 5% year on year to about 250 million metric tons, its iron ore imports are up 11% to around 315 million metric tons.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the second half of the cost curve, at around the 75th percentile. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 61% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the then 62% benchmark.

Fortescue's half-year NPAT of USD 1.9 billion—USD 0.62 per share—is up 23% on stronger iron ore prices and volumes, and lower unit cash costs. It declared an AUD 0.62 per share fully franked interim dividend, up 24% with higher earnings, but again a 65% payout, the midpoint of its 50%-80% target.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the second half of the cost curve, at around the 75th percentile. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 61% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the then 62% benchmark.

Fortescue's fiscal 2026 second-quarter shipments of 50 million metric tons are 2% higher than a year ago. Unit cash costs are USD 19.10 per metric ton, up 5% from the first quarter and the same quarter last year, driven by unfavorable inventory movements, higher diesel prices, and foreign exchange.

The iron ore price is up on last quarter as China's imports remain strong despite its steel production falling below 1 billion metric tons in 2025 for the first time since 2019. Its anti-involution campaign is reducing overcapacity, mainly via the closure of smaller, less efficient steelmakers.

Fortescue's 2026 first-quarter shipments are 49 million metric tons, up 4% on a year ago but 10% lower than the previous quarter. Increased volumes, along with favorable inventory movement and foreign exchange, see 10% lower unit cash costs on last year, at around USD 18.20 per metric ton.

The iron ore price has shrugged off re-escalation of the trade war between the United States and China, though copper is down moderately in response. Both are up about 10% since the last quarterly update of our assumed commodity prices.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the highest half of the cost curve. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 62% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the 62% benchmark.

Fortescue's fiscal 2025 NPAT fell 41% to USD 3.4 billion or USD 1.10 per share due to 18% weaker iron ore prices on slightly higher volumes. An AUD 0.60 fully franked final dividend was declared for a fiscal year total of AUD 1.10, down 44% on lower earnings and a reduced 65% payout, from 70%.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the highest half of the cost curve. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 62% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2025, the company realized an approximate 22% discount versus the 62% benchmark.

Fortescue's fourth-quarter shipments of 55 million metric tons are similar to last year, but are 19% up on the previous quarter. Driven by Iron Bridge, fiscal 2025 shipments of 196 million are 3% higher than fiscal 2024, while hematite unit cash costs of USD 18 per metric ton are broadly similar.

Fortescue is the world's fourth-largest iron ore exporter. Margins are well below industry leaders BHP and Rio Tinto, and some way behind Vale, meaning Fortescue sits in the highest half of the cost curve. This is a primary driver of our no-moat rating. Lower margins primarily result from price discounts from selling a lower-grade (57% to 58% iron) product compared with the 62% iron ore benchmark. The lower grade is effectively a cost for customers through a greater proportion of waste to transport and process, additional energy/coal per unit of steel and lower blast furnace productivity. This results in a lower realized price versus the benchmark. In the 10 years ended June 2024, the company realized an approximate 23% discount versus the 62% benchmark.

Shares of our iron ore, base metals, coal, and mineral sands miners have risen on last quarter after the shock of April 2, 2025 tariffs. With China driving demand for most commodities, investors appear to have concluded that tariffs wont materially weaken growth and commodity demand.