FMG - Fortescue Ltd

[qldfrog]

How big is the threat to iron ore price will Simandou mine be?

Interesting question or anywhere on earth whete geo political games push miners...iron ore is very..too..common

 

[basilio]

One of the purchases FMG made last year was a 60% stake in the Dutch renewable energy company HyEt.
HyEt has a very promising suite of technologies that would underpin FMG's drive to produce 15Millions tones of green hydrogen.
In particular they have a low cost continuous role solar panel that will be much cheaper and far easier to install than current glass panels.

Implications for FMG and HyEt
1) FMG could be the biggest purchaser of HyET products. Be interesting to see the related transactions charges in play
2) HyET already has a large range of commercial products as well as the technical skills that produced them. These are now in FMG/FFI control
3) The costs for the massive solar installations should drop substantially
4) HyEt also has Hydrogen technology that will mesh in with FMG's need for massive electrolysis capacity
5) FMG has an opportunity through HyEt to aggressively promote and profit from the solar technologies it offers.

I also understand that FMG will float HyEt on the stock market. Could be a valuable investment

Fortescue Future Industries invests in Dutch thin-film solar and H2 firm HyET

October 8 (Renewables Now) - Australia’s Fortescue Future Industries (FFI) has taken a 60% stake in Dutch company High yield Energy Technologies (HyET) Gro

renewablesnow.com

HyET Group | High Yield Energy Technologies

High Yield Energy Technologies…

www.hyetgroup.com

HyET Group | HyET Solar

www.hyetsolar.com

 

[basilio]

Overview of HyEt technologies (Now FMG)

About the High yield Energy Technologies (HyET) group​

The companies that form part of the HyET group create technologies that enable commercially viable, large scale access to decentral renewable energy sources. The primary objective of the HyET group is to develop a sustainable and profitable business based on the above objective. At the same time the HyET group pursues an active policy to develop applications of its technologies that support an environmentally sustainable economic development and rural poverty reduction.

Examples are large scale buffering of discontinuously generated renewable energy (e.g. from solar or wind mill parks) using high pressure hydrogen or very low cost building materials: roofing sheets with integrated solar modules.

Downloads:
HyET Solar BV (pdf)
HyET Hydrogen BV (pdf)
HyET NoCarbon BV (pdf)
HyET HyLab BV (pdf)
HyET Pro2NL BV (pdf)
HyET Lithium BV (pdf)
HyET E-Trol BV (pdf)

https://www.hyetgroup.com/about-hyet/

 

[basilio]

One thing I don't quite understand about the purchase of HyET by FMG. It doesn't seem to appear in the news stories on FMG. There is a three line mention of the purchase of the 60% stake in the company in the Dec 21 half year report. They also note that FMG is the major capital contributor to an expanded PV production facility.

For a company that thrives on promotion of its new renewable energy projects this seems like hiding your light under a bush.

 

[divs4ever]

One thing I don't quite understand about the purchase of HyET by FMG. It doesn't seem to appear in the news stories on FMG. There is a three line mention of the purchase of the 60% stake in the company in the Dec 21 half year report. They also note that FMG is the major capital contributor to an expanded PV production facility.

For a company that thrives on promotion of its new renewable energy projects this seems like hiding your light under a bush.

might be more in the planning than in the profit-making stage , some of these 'green technologies ' suck in a LOT of cash and research

if they float HyET don't expect me to be at the front of the queue

 

[basilio]

might be more in the planning than in the profit-making stage , some of these 'green technologies ' suck in a LOT of cash and research

if they float HyET don't expect me to be at the front of the queue

Don't think so at this stage. The PV technology is proven. The expansion into large scale production will offer an opportunity to capitalise on the low cost, roll out PV panels that HyET has developed. As I mentioned FMG could be one of the earliest users of the panels in their massive plans to develop large scale renewable energy facilities in Gladstone to power a Hydrogen electrolyser industry.

 

[basilio]

Quarterly production results posted. Short story posted below. Record production, $100 US a tonne return over FY22. Looking healthy.

Strong June Quarter performance contributes to record shipments of 189 million tonnes for FY22

Quarterly summary
• Continued focus on safety contributed to a Total Recordable Injury Frequency Rate (TRIFR) of 1.8 in the 12 months to 30 June 2022 (FY22), 10 per cent lower than 30 June 2021

• Record iron ore shipments of 49.5 million tonnes (mt) for the quarter and 189.0mt for FY22, exceeding full year guidance

• Average revenue of US$108/dry metric tonne (dmt) for the quarter, realising 78 per cent of the average Platts 62% CFR Index, and average revenue of US$100/dmt in FY22

• C1 cost of US$17.19/wet metric tonne (wmt) for Q4 FY22 and US$15.91/wmt in FY22

• Strong cash flow generation contributed to cash on hand of US$5.2 billion and net debt of US$0.9 billion at 30 June 2022, compared to net debt of US$2.4 billion at 31 March 2022

• Total capital expenditure for FY22 of US$3.1 billion, including the investment in the Iron Bridge Magnetite and Pilbara Energy Connect (PEC) projects

• Significant progress to decarbonise Fortescue’s mining fleet through the strategic partnership with Liebherr for the development and supply of green mining haul trucks

• FY23 guidance for shipments of 187 - 192mt inclusive of approximately 1mt from Iron Bridge and C1 cost for hematite of US$18.00 - US$18.75/wmt

• FY23 capital expenditure guidance (excluding FFI) of US$2.7 - US$3.1 billion, inclusive of sustaining and development capital, exploration and studies, decarbonisation and major projects

• FFI is progressing a portfolio of green energy projects, manufacturing initiatives and technology developments with FY23 expenditure anticipated to be US$600 - US$700 million.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02546348-6A1101567?access_token=83ff96335c2d45a094df02a206a39ff4

 

[Value Collector]

Quarterly production results posted. Short story posted below. Record production, $100 US a tonne return over FY22. Looking healthy.

Strong June Quarter performance contributes to record shipments of 189 million tonnes for FY22

Quarterly summary
• Continued focus on safety contributed to a Total Recordable Injury Frequency Rate (TRIFR) of 1.8 in the 12 months to 30 June 2022 (FY22), 10 per cent lower than 30 June 2021

• Record iron ore shipments of 49.5 million tonnes (mt) for the quarter and 189.0mt for FY22, exceeding full year guidance

• Average revenue of US$108/dry metric tonne (dmt) for the quarter, realising 78 per cent of the average Platts 62% CFR Index, and average revenue of US$100/dmt in FY22

• C1 cost of US$17.19/wet metric tonne (wmt) for Q4 FY22 and US$15.91/wmt in FY22

• Strong cash flow generation contributed to cash on hand of US$5.2 billion and net debt of US$0.9 billion at 30 June 2022, compared to net debt of US$2.4 billion at 31 March 2022

• Total capital expenditure for FY22 of US$3.1 billion, including the investment in the Iron Bridge Magnetite and Pilbara Energy Connect (PEC) projects

• Significant progress to decarbonise Fortescue’s mining fleet through the strategic partnership with Liebherr for the development and supply of green mining haul trucks

• FY23 guidance for shipments of 187 - 192mt inclusive of approximately 1mt from Iron Bridge and C1 cost for hematite of US$18.00 - US$18.75/wmt

• FY23 capital expenditure guidance (excluding FFI) of US$2.7 - US$3.1 billion, inclusive of sustaining and development capital, exploration and studies, decarbonisation and major projects

• FFI is progressing a portfolio of green energy projects, manufacturing initiatives and technology developments with FY23 expenditure anticipated to be US$600 - US$700 million.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02546348-6A1101567?access_token=83ff96335c2d45a094df02a206a39ff4

I haven’t had a chance to read the report throughly yet, but I gave it a quick scan and was impressed with the cash generation, the dividend should be higher than 1st half. Of course the amount of the dividend does depend on exactly what the pay out ratio is, given that their policy is to pay out between 50% - 80% we don’t know exactly what portion of that strong cashflow will be paid out as a dividend.

But if they decide to end the year with a payout ratio of 80% that’s going to be a solid divvy.

 

[basilio]

Came across another analysis of FMG. The headline screams a $6Billion Revenue hole. My God run away or sell up NOW and find something else to invest in.

I thought it was a a very biased and blinkered analysis. Every investor understood the 2021 results on a back of $200 a ton plus iron ore prices was a one off. Take the divvies sure. But don't expect those sort of prices to continue. However this analysis suggest a serious financial problem when that simply isn't true.

I also noted that there is not a single acknowledgment that the FMG renewable energy programs will certainly improve the bottom line via cost reductions and hopefully result in more profits in future years.

Meanwhile the company and shareholder have a very successful operation moving 185-190m tonnes of iron at roughly $100 Us a ton with operating costs around $17 a ton. What a problem..

Fortescue’s $6 billion Revenue Hole​

By Glenn Dyer | More Articles by Glenn Dyer
MORE FORTESCUE METALS GROUP LTD CONTENT

What Twiggy Forrest’s Fortescue Metals Group didn’t tell you in its June quarter and 2021-22 production report on Thursday was the $US6 billion hole in its annual revenue line.

Fortescue's $6 billion Revenue Hole – ShareCafe

What Twiggy Forrest’s Fortescue Metals Group didn’t point out or explain in its June quarter and 2021-22 production report on Thursday was the $US6 billion hole in its annual revenue line.

www.sharecafe.com.au

 

[bk1]

Opinions, eh...

 

[basilio]

Opinions, eh...

Indeed !! Only 1 "Buy" 9 "Sell" . If you followed the analysts you'd be a mug to be in FMG.

Frankly, IMV, if one followed the analysts you would be a mug full stop. I believe most if not all of the analysts have misjudged FMG on a number of factors

1) They are not taking seriously the drive by FMG to create a massive new renewable energy company. In that context they totally undervalue the drive, financial clout, proven engineering capacity and marketing capacity of the company. They are also gravely underestimating the urgency of such a program and the opportunity for successful companies to be quite profitable.

2) I believe they undervalue FMG's capacity to protect its iron ore markets. As far as I can see FMG takes great care to ensure it's product meets the needs of its customers. The proof is in the current ore sales which are at record levels despite economic pressures.

3) Finally I think they are disrespecting the basic value of the FMG iron ore operations . They have excellent cost control which will only get better as they strip energy costs out of their budget. They will make a decent profit selling ore at $50 a ton. Yet current returns are still around $100 a ton. The predictions of crashing iron ore prices are just that..

 

[Value Collector]

Opinions, eh...

When FMG was $1.80 the consensus opinion of the analysts was the same, I say follow their opinions at your own peril.

 

[basilio]

Brief overview of FMG Diggers and Dealers mining conference presentation.
Essentially CEO Elizabeth Gaines said the green energy push was well on track and would return shareholder value . She highlighted a number of contracts that have already been signed.

CEO comments​

Gaines said:

We’re all facing significant inflationary pressures which impacts our margins — and, in fact, this could get even worse given the current geopolitical environment. So, it’s imperative for all of us to accelerate our transition to green energy and reduce our reliance on fossil fuels, so that we can protect and maintain our cost and our margins.

For our size and scale, there is no other mining company in the world that is taking the action we are to eliminate emissions.

We know it is when heavy emitters like us take action that it makes the biggest difference.

We plan to have Fortescue’s operations running on green energy within the next eight years. This includes our haul trucks, our iron ore trains and our power stations.

Industry must change its business model from producing emissions – to reducing and eliminating emissions.

She also commented how removing its reliance on fossil fuels makes long-term business sense. This could be helpful for the Fortescue share price. It’s developing an ‘infinity train’ that will use gravitational energy to recharge its battery electric systems without any additional charging requirements.

These efforts will “accelerate Fortescue’s race to reach net zero emissions by 2030” and lower “operating costs, creating maintenance efficiencies, and generating productivity improvements.”

'World's greatest concern': Can Fortescue really help the planet AND its profit margin?

Fortescue Metals Group Limited (ASX:FMG) shares are in focus after the CEO spoke at the Diggers & Dealers Mining Conference.

www.fool.com.au

 

[Garpal Gumnut]

Brief overview of FMG Diggers and Dealers mining conference presentation.
Essentially CEO Elizabeth Gaines said the green energy push was well on track and would return shareholder value . She highlighted a number of contracts that have already been signed.

CEO comments​

Gaines said:



She also commented how removing its reliance on fossil fuels makes long-term business sense. This could be helpful for the Fortescue share price. It’s developing an ‘infinity train’ that will use gravitational energy to recharge its battery electric systems without any additional charging requirements.

These efforts will “accelerate Fortescue’s race to reach net zero emissions by 2030” and lower “operating costs, creating maintenance efficiencies, and generating productivity improvements.”

'World's greatest concern': Can Fortescue really help the planet AND its profit margin?

Fortescue Metals Group Limited (ASX:FMG) shares are in focus after the CEO spoke at the Diggers & Dealers Mining Conference.

www.fool.com.au

From my reading of it FFI has not spent one brass razoo on anything approaching a Hydrogen platform for FMG and the former is presently about setting up a corporate structure foreign to that of an Iron Ore Company which is the latter.

Good luck with that. FMG will bleed money in to FFI.

Good intentions I favour, it is the execution that is problematic for FMG.

gg

 

[Value Collector]

From my reading of it FFI has not spent one brass razoo on anything approaching a Hydrogen platform for FMG and the former is presently about setting up a corporate structure foreign to that of an Iron Ore Company which is the latter.

Good luck with that. FMG will bleed money in to FFI.

Good intentions I favour, it is the execution that is problematic for FMG.

gg

Before they can begin making large scale hydrogen, they first need to be producing large scale renewable energy.

So the first step is to build wind and solar infrastructure, which they are already doing and some of which is already operating.

Then ofcourse once their solar and wind projects begin to come online, they don’t immediately start producing hydrogen, the first sensible step is to use this renewable electricity to offset the electricity the y normally get by burning gas and diesel, and this is exactly what they are doing now.

FFI’s main job at the moment is to get the hydrogen technology right, which they are doing with their small scale tests and experiments, and in the mean time continue to roll out wind and solar. Then by the time they are producing more green electricity than their operations can soak up, they should be ready to starting feeding the excess into making hydrogen and hydrogen based fuels, to both use themselves and to sell.

 

[sptrawler]

Well the FMG, FFI and AGL joint venture is moving along, time will tell.

AGL and Fortescue Future Industries' green hydrogen feasibility study underway in the Hunter

AGL Energy today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.

www.agl.com.au

AGL Energy (AGL) today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.

Independent technical consultancy GHD Advisory is carrying out the feasibility study for AGL as the hub provider and Fortescue Future Industries (FFI) as the exclusive producer of green hydrogen at the site.

The feasibility study, which is mapping key operational and commercial plans for the project as well as developing a production timeline, is also leveraging the input of additional key industry and consortium partners across multiple sectors which have signed Memorandums of Understanding related to the project:

• APA Group – a leading Australian energy infrastructure business
• INPEX CORPORATION – a global energy exploration and production company
• Jemena – a leading owner and operator of a diverse portfolio of energy infrastructure assets across Australia
• Osaka Gas Australia – a wholly-owned subsidiary of Osaka Gas Co Ltd – global natural gas and power company.

AGL Chief Operating Officer, Markus Brokhof said the feasibility study, due for completion by the end of the year, was another big step forward in AGL’s vision for an industrial low carbon energy hub at the site of Liddell and Bayswater power stations.

“As we create our Hunter Energy Hub, our aim is to develop strong partnerships that enable an efficient ecosystem and create a circular economy,” Mr Brokhof said.

“By working hand in hand with Fortescue Future Industries, we will be supporting Australia’s emerging green hydrogen industry and bringing our expertise in large-scale renewable generation to the fold.”

“Early estimates suggest the site can support a hydrogen facility of up to 2GW in scale, but we will also test critical inputs including renewable energy costs, firming requirements, electrolyser capital costs, logistics and utilisation.”

 

[Value Collector]

FMG announced a FY 2022 final dividend of $1.21 which is a very solid result.

I was working out the yield the dividend represents based on certain entry levels, and I realised that even if you purchased your FMG shares right at the peak of $26 18 months ago, you have been earning 15% dividend (including franking) over that 18 months, not a bad income return while you wait for FMG’s true value to be recognised.

Of course if you purchased sub $20 your dividend return has be amazing.

 

[InsvestoBoy]

FMG announced a FY 2022 final dividend of $1.21 which is a very solid result.

I was working out the yield the dividend represents based on certain entry levels, and I realised that even if you purchased your FMG shares right at the peak of $26 18 months ago, you have been earning 15% dividend (including franking) over that 18 months, not a bad income return while you wait for FMG’s true value to be recognised.

Of course if you purchased sub $20 your dividend return has be amazing.

What was your entry again VC? $2.something?

Gonna give us your true value estimate?

 

[Value Collector]

What was your entry again VC? $2.something?

Gonna give us your true value estimate?

The cheapest I bought was $1.80, but I started accumulating before that at $4.23 and bought a few parcels on the way down to $1.80, and have bought multiple parcels over time on the way up, the most I have paid was about $22.50 that I remember, that was a put option that was exercised.

As far as what I think they are worth, I think $28 would be the bare minimum potentially much higher.

Basically there is a lot more to my calculations than just dividend yield, but I think a 7% yield shouldn’t be to much to ask for a company like FMG if it’s paying out 80% of its earnings, and with franking credits it only needs to be paying out an average of around 68cents in dividends every 6 months. So I see $28 as a very reasonable valuation, with a lot of potential upside beyond that.

Of course markets will fluctuate though, and FMG seems to be subject to constant worry about iron ore price, China relations, recession fear etc etc, but as I said earlier I feel the long term holder will be well rewarded via high dividends while they wait for the eventual revaluation to a much higher level.

 

[Garpal Gumnut]

The only problem I see with FMG is someone like Hu Flung Dung in a radar control tower on the Western side of the Taiwan Strait getting his p's and q's mixed up with the American cousins playing a Boxing Day Syd-Hob in the Strait and pulling a pin so's the Chinese cousins become warry, fling dung and FMG is collateral damage.

I was looking at buying today for the divi but nobody else seemed to be, as it dropped nearly 5%, so I didn't.

The divi is not inconsequential and good luck to the long term holders.



So it's a divi of $1.21 ff vs a drop of $0.98 with a way to go before it gets paid and in between some news on the Gladstone effort. And other Iron Ore companies run the same risk with a lesser divi though BHP and RIO are more diversified.

I should have bought at $14 in Nov 21, too greedy I was, and again good luck to those who bought at $2 and $4.

gg