FMG - Fortescue Ltd

[Value Collector]

Fortescue aims to split the bill on hydrogen build

A plan to build an ammonia project in the Norwegian fjords will cost in the “low $US1 billion” range.

www.afr.com

Split the bill with taxpayers, keep the gains.
Probably the reason VC wants more taxes, to pay his fmg dividends
I should not be hypocritical, i currently own some FMG as a trade play, with nice raising SL

Well, FMG is one of the largest Tax payers they paid $2,600,000,000 ($2.6B) in tax last year, any incentives they get to help the government meet its targets would probably be no more than a few percent of that Tax that FMG already pays, and if FMG end up making a profit that will mean even more tax to the government. Not to mention the income tax paid on all the jobs created during the project.

But also, all sorts of energy project receive incentives, even the coal industry and oil and gas. It’s nothing to be worried about, the government generally makes much more revenue from the projects over time than they put out in incentives.

 

[DrBourse]

Our Aust Analysts/Brokers are OFF Their Rockers......
Just because a Stock does not quite meet their Guesstimates of 12 mths ago, they slam that stock with downgrades - it's always been a gripe of mine....

That FMG EOFY Bal Sheet & Report was pretty Good IMO.... The current (yesterday) FMG Intrinsic Value is about $25.63.....
It will take a few days for the Intelligencia to catch on that FMG is heading for AUS$30....

 

[TimeISmoney]

The media love to bash Twiggy, it's iron ore business as usual.

 

[DrBourse]

Our Aust Analysts/Brokers are OFF Their Rockers......
Just because a Stock does not quite meet their Guesstimates of 12 mths ago, they slam that stock with downgrades - it's always been a gripe of mine....

That FMG EOFY Bal Sheet & Report was pretty Good IMO.... The current (yesterday) FMG Intrinsic Value is about $25.63.....
It will take a few days for the Intelligencia to catch on that FMG is heading for AUS$30....

What those Idiot Analysts/Brokers should be doing is 'issuing an APOLOGY to everyone for their Stupidity in getting their Guesstimates WRONG yet again'.....
AND, issuing a statement saying that 'they will do better in the Future'....
When you hear the apology, you will probably notice a "Gaggle of Flying Pink Elephants zap past your window".......

 

[Value Collector]

What those Idiot Analysts/Brokers should be doing is 'issuing an APOLOGY to everyone for their Stupidity in getting their Guesstimates WRONG yet again'.....
AND, issuing a statement saying that 'they will do better in the Future'....
When you hear the apology, you will probably notice a "Gaggle of Flying Pink Elephants zap past your window".......

My motto is “Dividends don’t lie” but sometimes analysts do, also analyst are often super focused on short term outcomes, things that long term holders aren’t worried about.

P.s “Dividends don’t lie “ is also the title to a good book.

 

[qldfrog]

Have you got access to the complete article, my paywall bypass doesn't work on afr?

Sorry no, but i get access to the paper version weekly at the local library

 

[Chipp]

GS 12m price tgt $15.40 atm . GS had a sell on FMG 23feb ( SP was $28 ) this year with a sub $20 target

 

[basilio]

Well another fantastic buying opportunity for FMG.

Every other share has been hit in the sell off today but FMG has tanked. FMG did go ex dividend today but it is still a hefty drop. I think a number of stop losses were hit.

 

[BossMan.]

Well another fantastic buying opportunity for FMG.

Every other share has been hit in the sell off today but FMG has tanked. FMG did go ex dividend today but it is still a hefty drop. I think a number of stop losses were hit.

I agree, seems like an over reaction/oversell off. I bought in today with a stop loss.

FMG is currently trading at a P/E of 6.64 even with a further slide in the Iron Ore it still represents reasonable value in my opinion.

 

[TimeISmoney]

 

[Chipp]

I agree, seems like an over reaction/oversell off. I bought in today with a stop loss.

FMG is currently trading at a P/E of 6.64 even with a further slide in the Iron Ore it still represents reasonable value in my opinion.

If , big if FMG IO realised price settles at GS estimates in the high 70's the forward PER will not be 7 at current price levels . Its the value of future earnings that dictates price going forwards . FMG got a lot of capex going on in near future . Do i think FMG will be a great medium term trade ( 6-12 weeks) soon ? Sure . Is it a great entry for the buy and hold crowd , not so sure . If i was a buy and holder i'd be doing a spreadsheet on PER based at a sliding IO price scale .

 

[rcw1]

Have you got access to the complete article, my paywall bypass doesn't work on afr?

Fortescue aims to split the bill on hydrogen build
Peter Ker
Peter KerResources reporter
Updated Aug 28, 2024 – 3.35pm,
first published at 9.29am

Fortescue will use debt, government grants and equity sell-downs to minimise the toll on its balance sheet from the estimated $US4 billion ($5.9 billion) cost of its next two hydrogen projects.
Insights into the potential capital required of the next wave of hydrogen projects came as Fortescue raised its dividend by 16 per cent and reported a $US5.7 billion annual underlying profit on Wednesday.

Total dividends for the year of $1.97 a share translate into $2.2 billion for Andrew and Nicola Forrest, who collectively control 36.7 per cent of Fortescue.
The iron ore miner announced in July that it would slow its push into hydrogen as part of an austerity campaign that would involve 700 job cuts. The belt-tightening comes at a time when analysts believe weak iron ore prices will drive a 15 per cent slide in revenue in the year ahead.

Total dividends for the year of $1.97 a share translate into $2.2 billion for Andrew and Nicola Forrest, who collectively control 36.7 per cent of Fortescue.
The iron ore miner announced in July that it would slow its push into hydrogen as part of an austerity campaign that would involve 700 job cuts. The belt-tightening comes at a time when analysts believe weak iron ore prices will drive a 15 per cent slide in revenue in the year ahead.

But Fortescue has not fully abandoned the nascent hydrogen sector, and plans to bring projects in Norway and Brazil to the board for an investment decision over the next 12 months.
Fortescue energy chief Mark Hutchinson said both projects would, in fact, make green ammonia, a compound of hydrogen and nitrogen that was easier to transport than hydrogen.
He said a plan to build an ammonia project at Holmaneset in the Norwegian fjords would cost in the “low $US1 billion” range, with construction expected to start in 2025 and first production by 2027.
But Mr Hutchinson stressed that Fortescue did not plan to cover the full $US1 billion price tag, with the European Commission already pledging €204 million ($335 million) towards the project.
“We would get going on the project, we would bring bank debt in at some stage, probably at financial close, of 50 to 60 per cent, and then we would sell down some of the equity,” he said of the project’s funding.
Mr Hutchinson did not provide an exact cost estimate for Brazil’s Pecem ammonia project, but said it would be “three times the size” of the Norwegian project.
Fortescue has made similar remarks about the funding structure for its energy projects in past years, but has so far fully funded its hydrogen projects in Arizona and Gladstone.
The company had $US4.9 billion of cash on hand and net debt of $US500 million at June 30.
Credit rating agency Moody’s Investor Services said those metrics left Fortescue well-placed to invest in projects even though the outlook for iron ore prices was soft.
“This leaves Fortescue with significant capacity as the company steps up its decarbonisation efforts and capital expenditure for Fortescue Energy in fiscal 2025, while considering further green energy projects,” said Moody’s analyst Sean Williams.
Fortescue’s total capital spending in the next year will be between $US3.7 billion and $US4.3 billion, with only $US500 million going to energy projects, while up to $US900 million of the spend will be on decarbonising its iron ore mines.
Fortescue vowed to continue returning between 50 per cent and 80 per cent of earnings to shareholders as dividends.
The $1.97-a-share dividend total for 2023-24 equated to a 70 per cent payout ratio; an improvement on last year’s 65 per cent.
The stronger dividend was made possible by an 8 per cent rise in revenue on the back of stronger iron ore prices, and came despite a rare decline in annual export volumes.
It was also made possible by an austerity campaign that saw Fortescue announce the 700 job cuts last month, on top of hundreds of job cuts in the previous 15 months.
Analyst consensus measured by Bloomberg had pointed to a $US6.09 billion underlying profit.
Morgans analyst Adrian Prendergast said higher than expected depreciation and amortisation charges were the major reason why Fortescue’s profit result was lower than expected.
Fortescue shares have lost 36.6 per cent of their value since January 1, and Mr Prendergast believed the stock was offering good value at current levels.
“The stock had become oversold following two discounted block trades in two months and fears around China growth [where we expect much more stable iron ore fundamentals],” he said.
Benchmark ore with 62 per cent iron was fetching $US101.10 a tonne on Tuesday, according to S&P Global Platts.
Wednesday’s Fortescue accounts also revealed that former chief executive Fiona Hick was paid $2.4 million for working eight months in 2023-24.
Her resignation was announced in August last year, but she remained employed until February 28. Her pay was described as $327,205 of fixed remuneration, plus a $2.08 million “termination payment”.
Former chief financial officer Christine Morris, who quit shortly after Ms Hick, was paid a termination payment of just over $381,000 and fixed remuneration of just under $194,000.

 

[qldfrog]

Fortescue aims to split the bill on hydrogen build
Peter Ker
Peter KerResources reporter
Updated Aug 28, 2024 – 3.35pm,
first published at 9.29am

Fortescue will use debt, government grants and equity sell-downs to minimise the toll on its balance sheet from the estimated $US4 billion ($5.9 billion) cost of its next two hydrogen projects.
Insights into the potential capital required of the next wave of hydrogen projects came as Fortescue raised its dividend by 16 per cent and reported a $US5.7 billion annual underlying profit on Wednesday.

Total dividends for the year of $1.97 a share translate into $2.2 billion for Andrew and Nicola Forrest, who collectively control 36.7 per cent of Fortescue.
The iron ore miner announced in July that it would slow its push into hydrogen as part of an austerity campaign that would involve 700 job cuts. The belt-tightening comes at a time when analysts believe weak iron ore prices will drive a 15 per cent slide in revenue in the year ahead.

Total dividends for the year of $1.97 a share translate into $2.2 billion for Andrew and Nicola Forrest, who collectively control 36.7 per cent of Fortescue.
The iron ore miner announced in July that it would slow its push into hydrogen as part of an austerity campaign that would involve 700 job cuts. The belt-tightening comes at a time when analysts believe weak iron ore prices will drive a 15 per cent slide in revenue in the year ahead.

But Fortescue has not fully abandoned the nascent hydrogen sector, and plans to bring projects in Norway and Brazil to the board for an investment decision over the next 12 months.
Fortescue energy chief Mark Hutchinson said both projects would, in fact, make green ammonia, a compound of hydrogen and nitrogen that was easier to transport than hydrogen.
He said a plan to build an ammonia project at Holmaneset in the Norwegian fjords would cost in the “low $US1 billion” range, with construction expected to start in 2025 and first production by 2027.
But Mr Hutchinson stressed that Fortescue did not plan to cover the full $US1 billion price tag, with the European Commission already pledging €204 million ($335 million) towards the project.
“We would get going on the project, we would bring bank debt in at some stage, probably at financial close, of 50 to 60 per cent, and then we would sell down some of the equity,” he said of the project’s funding.
Mr Hutchinson did not provide an exact cost estimate for Brazil’s Pecem ammonia project, but said it would be “three times the size” of the Norwegian project.
Fortescue has made similar remarks about the funding structure for its energy projects in past years, but has so far fully funded its hydrogen projects in Arizona and Gladstone.
The company had $US4.9 billion of cash on hand and net debt of $US500 million at June 30.
Credit rating agency Moody’s Investor Services said those metrics left Fortescue well-placed to invest in projects even though the outlook for iron ore prices was soft.
“This leaves Fortescue with significant capacity as the company steps up its decarbonisation efforts and capital expenditure for Fortescue Energy in fiscal 2025, while considering further green energy projects,” said Moody’s analyst Sean Williams.
Fortescue’s total capital spending in the next year will be between $US3.7 billion and $US4.3 billion, with only $US500 million going to energy projects, while up to $US900 million of the spend will be on decarbonising its iron ore mines.
Fortescue vowed to continue returning between 50 per cent and 80 per cent of earnings to shareholders as dividends.
The $1.97-a-share dividend total for 2023-24 equated to a 70 per cent payout ratio; an improvement on last year’s 65 per cent.
The stronger dividend was made possible by an 8 per cent rise in revenue on the back of stronger iron ore prices, and came despite a rare decline in annual export volumes.
It was also made possible by an austerity campaign that saw Fortescue announce the 700 job cuts last month, on top of hundreds of job cuts in the previous 15 months.
Analyst consensus measured by Bloomberg had pointed to a $US6.09 billion underlying profit.
Morgans analyst Adrian Prendergast said higher than expected depreciation and amortisation charges were the major reason why Fortescue’s profit result was lower than expected.
Fortescue shares have lost 36.6 per cent of their value since January 1, and Mr Prendergast believed the stock was offering good value at current levels.
“The stock had become oversold following two discounted block trades in two months and fears around China growth [where we expect much more stable iron ore fundamentals],” he said.
Benchmark ore with 62 per cent iron was fetching $US101.10 a tonne on Tuesday, according to S&P Global Platts.
Wednesday’s Fortescue accounts also revealed that former chief executive Fiona Hick was paid $2.4 million for working eight months in 2023-24.
Her resignation was announced in August last year, but she remained employed until February 28. Her pay was described as $327,205 of fixed remuneration, plus a $2.08 million “termination payment”.
Former chief financial officer Christine Morris, who quit shortly after Ms Hick, was paid a termination payment of just over $381,000 and fixed remuneration of just under $194,000.

When you buy fmg, you buy profit from iO and losses from woke lala land, only goes as far as the taxpayer purse..so a gamble on fed budget

 

[Value Collector]

If , big if FMG IO realised price settles at GS estimates in the high 70's the forward PER will not be 7 at current price levels . Its the value of future earnings that dictates price going forwards . FMG got a lot of capex going on in near future . Do i think FMG will be a great medium term trade ( 6-12 weeks) soon ? Sure . Is it a great entry for the buy and hold crowd , not so sure . If i was a buy and holder i'd be doing a spreadsheet on PER based at a sliding IO price scale .

Have you calculated what their earnings would be at $70 per tonne? Maybe you do need to do a spread sheet.

 

[Chipp]

Have you calculated what their earnings would be at $70 per tonne? Maybe you do need to do a spread sheet.

I will never buy and hold FMG , even on a swing trade i will never hold into earnings or a quarterly . WTF would i do that spreadsheet . I will certainly get a broker note from a source i trust that will give me a guide . One thing i do know atm consensus is a 10 - 15% drop in revenue YoY . Costs wont change a lot so back of the envelope will do me fine . I only do what I need to . I am busy enough as it is . I aint no part timer .. not compelling looking at this

 

[sptrawler]

I dont know what everyone is getting worked up about, it is situation normal IMO.
Just getting back into the buy range.

 

[Value Collector]

I will never buy and hold FMG , even on a swing trade i will never hold into earnings or a quarterly . WTF would i do that spreadsheet . I will certainly get a broker note from a source i trust that will give me a guide . One thing i do know atm consensus is a 10 - 15% drop in revenue YoY . Costs wont change a lot so back of the envelope will do me fine . I only do what I need to . I am busy enough as it is . I aint no part timer .. not compelling looking at this

View attachment 183707

Hahaha, good luck then.

 

[Value Collector]

I dont know what everyone is getting worked up about, it is situation normal IMO.
Just getting back into the buy range.

View attachment 183710

The market was down 1.8% today, FMG adjusted for the ex div date was only down 1.3%.

So yeah, no need to get worked up, markets fluctuate, if people can’t handle fluctuations they should stick to term deposits and accept the mediocre return that entails.

 

[sptrawler]

The market was down 1.8% today, FMG adjusted for the ex div date was only down 1.3%.

So yeah, no need to get worked up, markets fluctuate, if people can’t handle fluctuations they should stick to term deposits and accept the mediocre return that entails.

Swings and roundabouts, the banks are doing ok ATM.
Every sector has its ups and downs.

 

[Chipp]

Swings and roundabouts, the banks are doing ok ATM.
Every sector has its ups and downs.

Yeah The near 50% DD certainly aren't for everyone , this is why FMG never a buy and hold for me . Happy to take those 2-3month 40% ish rallies though . will never hold for a Div though