FY23 Full Year Results

Highlights

• Appointment of Dino Otranto as Fortescue Metals Chief Executive Officer.
• Safety is Fortescue’s most important Value, and the team achieved a Total Recordable Injury Frequency Rate of 1.8 in the 12 months to 30 June 2023 (FY23).
  
• Record iron ore shipments of 192 million tonnes achieved the top end of market guidance, contributing to the third highest earnings in Fortescue’s 20 year history.
  
• Underlying EBITDA of US$10.0 billion with an Underlying EBITDA margin of 59 per cent.
  
• Underlying net profit after tax (NPAT) of US$5.5 billion.
  
• Statutory NPAT of US$4.8 billion after a US$726 million non-cash impairment charge relating to Iron Bridge.
  
• Net cash flow from operating activities of US$7.4 billion and free cash flow of US$4.3 billion.
  
• Strong balance sheet with cash of US$4.3 billion and net debt of US$1.0 billion as at 30 June 2023. Gross debt to last 12 months Underlying EBITDA of 0.5 times and gross gearing of 23 per cent.
  
• Fully franked final dividend of A$1.00 per share, increasing total dividends declared in FY23 to A$1.75 per share, equating to A$5.4 billion and a 65 per cent payout of Underlying NPAT. 
• Iron Bridge achieved first concentrate loaded on ship in July 2023. The updated life of mine C1 cost attributable to Fortescue is estimated at US$45/wet metric tonne.
  
• Continued progress on decarbonisation, including the deployment of the first battery electric haul truck and the first dual fuel green ammonia locomotive prototypes to the Pilbara.
  
• Total global economic contribution of A$26.3 billion in FY23, including A$5.5 billion in corporate taxes and State government royalties.
  
• Operating segments realigned to Fortescue Metals and Fortescue Energy to reflect the strategic objectives and operations of each segment. Fortescue Energy comprises Fortescue Future Industries (FFI), Fortescue WAE and Fortescue Hydrogen Systems.
  
• Disciplined capital allocation framework prioritises maintaining a strong balance sheet and capital returns to shareholders with the dividend policy maintained to payout 50 - 80 per cent of Underlying NPAT.
  
• Guidance provided for Fortescue Energy, with FY24 net operating expenditure of approximately US$800 million and capital expenditure and investments of approximately US$400 million. This includes operating expenditure incurred for decarbonisation.
  
• Consistent with the new operating segments, going forward, the 10 per cent of Fortescue’s NPAT to fund FFI will no longer apply and all projects and investments will be assessed on their own merits consistent with Fortescue’s capital allocation framework.

Appointment of Chief Executive Officer 

• Dino Otranto has been appointed Chief Executive Officer of Fortescue Metals.
  
• Mr Otranto joined Fortescue in 2021 as Chief Operating Officer. A highly qualified senior executive, Mr Otranto has over twenty years’ experience in the global energy and resources industry, spanning various commodities and operations across the globe.
  
• Mr Otranto brings significant operational, technical and financial expertise, and a strong focus on safety leadership and employee engagement to Fortescue’s Senior Executive team.
  
• Fiona Hick has made a joint decision with the Fortescue Board to leave the Company and pursue other opportunities.

Sustainability

• Sustainability is critical to Fortescue’s future success and it is integrated into all aspects of the Company’s business. Fortescue’s FY23 Sustainability Report, along with the FY23 Annual Report, Climate Change Report and Corporate Governance Statement are available through the website.

• The safety and wellbeing of the Fortescue team members is the Company’s highest priority. In FY23, Fortescue Metals’ Total Recordable Injury Frequency Rate was 1.8 and the injury frequency risk profile decreased by 22 per cent compared to FY22.

• Fortescue is committed to providing a workplace where everyone feels safe to be themselves. Through the Fortescue Family Diversity Plan, the Company is building a workforce that reflects the communities in which team members live.

• The female employment rate was stable in FY23, with females holding 23 per cent of total positions, 26 per cent of leadership positions and 30 per cent of senior leadership roles.

• First Nations people represent 10 per cent of Fortescue’s Australian workforce and 16 per cent of the operational workforce. Fortescue’s Vocational Training Employment Centre (VTEC) program continues to provide sustainable career pathways for First Nations people, with over 1,400 First Nations people employed through VTEC since 2006.

• From the outset, Fortescue has been committed to delivering practical initiatives that drive economic and employment opportunities for First Nations people, evident through the Billion Opportunities program. Since it was established in 2011, more than A$4.6 billion in contracts have been awarded to over 190 First Nations Businesses.
  

• In FY23, Fortescue updated its Human Rights Policy and established its Free, Prior and Informed Consent Position Statement.
  

• Fortescue is taking action to eliminate emissions profitably across its iron ore operations and entire value chain. In FY23, the Company set a target to achieve Real Zero Scope 1 and 2 terrestrial emissions across its iron ore operations by 2030. Real Zero refers to no fossil fuels and no offsets. Fortescue plans to have its emissions reduction targets verified through the Science Based Targets initiative.
  

• Fortescue is committed to minimising the potential impacts its activities have on biodiversity by integrating mitigation measures into all stages of its operations. Water is a critical resource and its effective management is fundamental to the sustainability of Fortescue’s operations and the ecosystems and communities it operates in.
  

• Fortescue’s economic contribution creates wealth in the Australian economy and around the world. Payments to employees, suppliers, shareholders, and governments totalled A$26.3 billion in FY23.

Operational and financial performance 

• Strong operational performance across Fortescue’s supply chain contributed to record iron ore shipments and ore sold in FY23, two per cent higher than FY22.
• Revenue of US$16.9 billion decreased three per cent on FY22 as the increase in iron ore sales was more than offset by the five per cent decrease in average revenue.
• C1 cost of US$17.54/wet metric tonne (wmt) was 10 per cent higher than FY22, primarily reflecting an increase in diesel prices, labour rates and other consumables.
• Underlying EBITDA of US$10.0 billion was six per cent lower than FY22 with an Underlying EBITDA margin of 59 per cent.
  
• Underlying NPAT of US$5.5 billion was 11 per cent lower than FY22. Statutory NPAT of US$4.8 billion decreased by 23 per cent compared to FY22, reflecting the decrease in Underlying EBITDA and an impairment charge of US$726 million relating to Iron Bridge.
  

Financial position 

• Fortescue’s balance sheet remains strong with a cash balance of US$4.3 billion and gross debt of US$5.3 billion, resulting in net debt of US$1.0 billion as at 30 June 2023.
  
• Fortescue’s credit metrics are strong with gross debt to last 12 months Underlying EBITDA of 0.5 times and gross gearing of 23 per cent as at 30 June 2023.
  
• Net cash flow from operating activities of US$7.4 billion increased 12 per cent on FY22, with FY22 cash flow impacted by payment of the FY21 final tax instalment. The free cash flow of US$4.3 billion increased 19 per cent on FY22.
  

• Total capital expenditure and investments (cash flow basis) in FY23 was US$3.2 billion, including US$1.4 billion of sustaining and hub development capital, US$233 million of exploration and studies, US$949m in major iron ore projects and US$394 million by FFI.

   

Download the full report