The company’s shares are rebounding after this month’s selloff…
The post Fortescue (ASX:FMG) share price jumps 6% on surging revenue appeared first on The Motley Fool Australia. –
The Fortescue Metals Group Limited (ASX: FMG) share price is racing higher in early afternoon trade.
This follows the company’s release of its full-year results for the 2021 financial year.
At the time of writing, Fortescue shares are swapping hands for $21.21 apiece, up 6.05%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is sitting at 7,479 points, down 0.12%.
How did Fortescue perform in FY21?
Investors are scrambling to buy Fortescue shares after the company achieved another year of record growth.
The world’s fourth-largest iron ore miner reported an outstanding operating performance, driven by record annual shipments, higher realised prices and low-cost production.
Over the 12-month period, Fortescue delivered 182.2 million tonnes of iron ore, a 2% increase compared to FY20. Coupled with the average price of US$135 per dry metric tonne, this translated to a bumper revenue for the company.
Fortescue recognised the expansion of sales channels including increased sales through its China-based trading company, FMG Trading Shanghai. In addition, the continued strength in Chinese steel production supported the benchmark iron ore price.
In total, Fortescue collected US$22.3 billion in revenue, up 74% on the prior corresponding term.
Furthermore, its industry-leading C1 cost position of US$13.93 per wet metric tonne helped drive the company’s bottom line. Net profit after tax came to US$10.3 billion, soaring 117% from this time last year.
Fortescue advised it had US$7.9 billion of liquidity at the end of June 2021. This comprised US$6.9 billion in cash on hand and a US$1 billion undrawn revolving credit facility.
Total debt stood around US$4.2 billion, inclusive of US$810 million of leases. The gross gearing ratio (total debt divided by the book value of equity) came to 19%. This indicates a good measure of a company’s financial leverage.
Fortescue share price snapshot
Over the last 12 months, Fortescue shares have travelled in circles reflecting mediocre gains of just 10% for investors. This can be attributed to the spot price of iron ore, which rose strongly during the year, before falling in recent months.
Fortescue commands a market capitalisation of roughly $64.1 billion, making it the eighth largest company on the ASX.
Should you invest $1,000 in Fortescue right now?
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.