Fortress Minerals says earnings decline in 1HFY2023 caused by lower global steel demand
Iron ore producer Fortress Minerals' net profit fell by 13.6% y-o-y to US$9.07 million for the six months to Aug 31, the company's 1HFY2023. Revenue rose 10.4% y-o-y to US$30.1 million while gross profit fell 2.6% to $21.4 million for the same period. Finance costs more than doubled to US$467,329. However, net profit in 2QFY2023 recorded a 48% y-o-y rise to $4.86 million.
The increase in revenue was partially offset by lower average realised selling price of US$106.86/DMT for 1H FY2023 compared to US$142.57/DMT in the corresponding period last year. At the same time, average unit cost of sales increased 11.2% yoy to US$28.01/WMT for 1H FY2023, mainly due to higher inflation of production costs.
Net asset value per share increased to 11.91 US cents as at August 31, 2022 compared to 11.36 US cents as at February 28, 2022, supported by the Group’s business resilience and strong balance sheet.
Global crude steel production declined 5.4% year-on-year for January to July 2022.1 The decrease in global crude steel production follows a slowing economy in China and a property market crisis which has impacted demand. The company says that steel demand in China may see steel output cuts during the winter.
The company said it continues to deliver on strategic expansion plans and remains in a strong position to capitalise on synergies and efficiently ramp up production to remain resilient.