FMG - Fortescue Ltd

[Value Collector]

More detail on the Belinga project.

It is not small beer by any means.

From Gabfest to Gabon for Fortescue - ShareCafe

It finally looks like Fortescue Metals Group has signed a deal to start the trial iron ore mining operation in Gabon that investors and observers have been expecting for some time.

www.sharecafe.com.au

Another benefit to building an Iron Ore business outside of Australia that isn’t mentioned, is that it provides some insurance against our Government upsetting the Chinese and and having the Chinese out tariffs or sanctions on Australian Iron Ore.

 

[Sean K]

Reports about that FMG are going to lay off 1000 workers from head office and FFI. Refuted by the company but not positively. Who has 1000 workers in a head office and a loss making division of a resource company? And, didn’t they just make record profits or thereabouts? What’s going on here? Maybe the newspaper reports are bogus.

 

[sptrawler]

I wonder if it is tied to the Sun Cable play, in any way?

Administrators kick off sale process for Sun Cable

Administrators FTI Consulting have this week opened up the bidding process for Sun Cable, the company spearheading an ambitious $30 billion international solar

www.businessnewsaustralia.com

 

[Sean K]

I wonder if it is tied to the Sun Cable play, in any way?

Administrators kick off sale process for Sun Cable

Administrators FTI Consulting have this week opened up the bidding process for Sun Cable, the company spearheading an ambitious $30 billion international solar

www.businessnewsaustralia.com

Sun Cable might have made sense if the mirrors were in Perth and the power was transferred to the east coast of Australia when the sun had gone down and everyone switched on their appliances after work. Would have still required some incredibly big batteries and the very expensive power cord.

FMG devotees won’t see an issue here.

 

[sptrawler]

Forrest in the market for Sun Cable’s debt​

Andrew Forrest’s Tattarang is trying to buy up debts owed by the collapsed renewable energy play as his war with Atlassian billionaire Mike Cannon-Brookes continues.

 

[farmerge]

Forrest in the market for Sun Cable’s debt​

Andrew Forrest’s Tattarang is trying to buy up debts owed by the collapsed renewable energy play as his war with Atlassian billionaire Mike Cannon-Brookes continues.

Twiggy can have any or all of my debt as long as he pays 150% for it.

 

[Value Collector]

Sun Cable might have made sense if the mirrors were in Perth and the power was transferred to the east coast of Australia when the sun had gone down and everyone switched on their appliances after work. Would have still required some incredibly big batteries and the very expensive power cord.

FMG devotees won’t see an issue here.

Sun Cable isn’t an FMG project, it’s part of Andrew’s personal family business.

 

[Value Collector]

Forrest in the market for Sun Cable’s debt​

Andrew Forrest’s Tattarang is trying to buy up debts owed by the collapsed renewable energy play as his war with Atlassian billionaire Mike Cannon-Brookes continues.

That means he still believes in the project, and wants to take it over at a discount.

APA did this with Basslink last year, Bass link went into bankruptcy so APA swooped in and bought a chunk of its Debt as a discount.

If your goal is to own an asset that is currently in bankruptcy, buying its debt at a discount is a good way to get control of the asset.

 

[sptrawler]

Sun Cable isn’t an FMG project, it’s part of Andrew’s personal family business.

The first issue is getting control of the project, the second issue is then getting the money and backers to fund it.
The scope and size of the solar/ wind farm project is huge, it would fit well with the hydrogen production concept IMO.

 

[qldfrog]

The first issue is getting control of the project, the second issue is then getting the money and backers to fund it.
The scope and size of the solar/ wind farm project is huge, it would fit well with the hydrogen production concept IMO.

it is a nutcase project, let's be real

 

[sptrawler]

it is a nutcase project, let's be real

Who knows, ride the wave.

 

[qldfrog]

Who knows, ride the wave.

one cable under the sea to feed it all, outside the feasibility and tech side, the US managed to blow up not 1 but 2 gas pipes and have the EU submissive in no time, now imagine how Singapore would feel when a CCP " fishing boat" starts positioning outside the (Chinese own) port of Darwin ;-)

 

[sptrawler]

one cable under the sea to feed it all, outside the feasibility and tech side, the US managed to blow up not 1 but 2 gas pipes and have the EU submissive in no time, now imagine how Singapore would feel when a CCP " fishing boat" starts positioning outside the (Chinese own) port of Darwin ;-)

I don't think Twiggy Forrest agrees with the undersea cable, that is what caused the blow up with the Tim Brook Taylor bloke and why the project is in administration
.
The undersea cable would be a disaster IMO.

One, why would we be giving up a huge area of land to provide power to Singapore, when we might end up facing environmental issues getting permission to deploy enough for our own generation requirement.

Secondly, why would you spend a zillion dollars running a cable to Singapore, when they could turn around and say sorry we don't need it anymore we have another country who will supply the same amount of power cheaper, just a really dumb idea IMO.

That is why Forrest is trying to gain control of the project, so that the undersea cable doesn't happen and also it would fit nicely with his green hydrogen plan.

 

[Value Collector]

The first issue is getting control of the project, the second issue is then getting the money and backers to fund it.
The scope and size of the solar/ wind farm project is huge, it would fit well with the hydrogen production concept IMO.

Yep, it’s a huge project, but as I said it’s not part of FMG, it’s Andrew’s Personal company that is involved.

If Andrew is buying up the debt, I am guessing he is not going to have to much trouble finding it, especially with his FMG dividends coming in every 6months at $1 Billion plus

 

[Value Collector]

it is a nutcase project, let's be real

The solar and wind generation is not nuts, how you monetise that generation can be debated, they have lots of options, Andrew’s growing investments in Hydrogen mean he will be debating for that route, livers of under sea cables will want that, but the economics should win the debate.

 

[basilio]

The story going around is that Twiggy is taking the axe to FFI staffing as well FMG employees.

He is one ruthless SOB. I'm guessing that he has decided FFI has simply become too bloated in terms of staff vs output. FFI has been seeded around a couple of billion (10% of FMG profits) in the last few years. I suspect that with so much easy money in the kitty the temptation to build empires vs getting results was too much for some players

Twiggy is lowering the boom - probably as much to preserve dividends as any other reason. Hopefully he doesn't lose too much real talent and FFI can focus on what has to be done to producing best value renewable energy and hydrogen power.

 

[dat111]

I wonder what Twiggy is seeing... Is he seeing a huge economic down turn... Is he seeing the government not able or willing to fund green energy in the manner he originally thought... Do the layoffs indicate that FFI was a bad idea... or is this just a bump in the road that will work itself out ... The question is how do we position ourselves by what Twiggy is doing as he is much closer to the problem and the understanding of future possibilities than we are....

 

[farmerge]

Twiggy has no worries. What, with a couple of billion minimum coming into his coffers each year, he can possibly garner and draw development dollars that will see him become even wealthier. Just needs the bum polishers in Canberra to wake up to themselves and see past the next election date and their cosy salaries and pension benefits.

 

[Value Collector]

FMG announced released their half year report today, dividend is $0.75 which is lower that the $0.86 they paid the same time last year, mainly due to 2 reasons eg the pay out ratio was lower at 65% vs 70% last year, and earning were down slightly due to a lower Iron ore price last half compared to the prior corresponding period.

Still, even the lower dividend of $0.75 still represents a 9.74% pa return for the 6 months on a $22 share price when the franking is included, so happy days, especially for those of us that paid significantly less than $22 for our shares.
Several other factors bring a smile to my face, the iron ore price is currently higher now than in the previous half, so earnings should be tracking higher and the payout ratio is also normally higher in the final half so the next dividend should be even higher (depending on payout ratio of course)

The other thing that brings a small to my face is the idea that Iron bridge is ramping up and will be contributing to earnings soon, the Gabon project will is under way, and a whole host of energy projects are in the works, so all those earnings not being paid out as dividends are being invested on out behalf, and might end up contributing significantly more earnings in the future.

 

[basilio]

6 monthly earnings report out today. Dividend will be 75c per share. Worth noting that 2023 has started with iron ore prices around the $120 a ton mark compared to the $85-100 mark for much of the last 6 months. Significant development programs also included in report.

Strong financial results and reliable dividend underpinned by record half year operating performance

Fortescue Executive Chairman, Dr Andrew Forrest AO, said “The Fortescue team continues to deliver strong, consistent performance and returns for our shareholders, maintaining our position as the world’s lowest cost iron ore producer, while we decarbonise our operations profitably and become a global green energy, metals and products business.

“We are one of the highest returning companies on the ASX over 20 years. We have consistently delivered returns to our shareholders and building on the more than US$22 billion paid, today we have announced a fully franked interim dividend of A$0.75 per share, representing 65 per cent of NPAT in the period.”

Highlights
• Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2022, consistent with December 2021

• Record half year iron ore shipments of 96.9 million tonnes (mt), four per cent higher than the prior comparable period

• H1 FY23 underlying EBITDA of US$4.4 billion with an underlying EBITDA margin of 56 per cent

• Net profit after tax (NPAT) of US$2.4 billion and earnings per share (EPS) of US$0.77 (A$1.15)

• Strong balance sheet with cash on hand of US$4.0 billion and net debt of US$2.1 billion at 31 December 2022

• Fully franked interim dividend declared of A$0.75 per share, a 65 per cent payout of H1 FY23 NPAT

• Guidance for FY23 shipments, C1 cost and capital expenditure is unchanged.


“We have done this while delivering record iron ore shipments, and finishing off construction of Iron Bridge

FY23 Half Year Results (PDF 332.5 KB)

FY23 Half Year Results Presentation (PDF 15,465.3 KB)