Shares of Australian miner Fortescue soared more than 6% on Monday as the mining giant reported full-year profits that hit an all-time high.
Net income after tax reached $ 10.3 billion, 117% more than a year ago, the firm said. This is the second consecutive year of record profits for the company.
Its full-year revenue was $ 22.3 billion, up 74% from the previous year.
It will pay total dividends of A $ 3.58 per share, an increase of 103% over last year.
Shares of the firm rose 6.6% on Monday.
Analysts have been optimistic for miners as iron ore prices rose this year, boosting profits for mining companies.
Strong demand from China
Demand for iron ore has increased the strong demand for Chinese steel: steel is made from iron ore. On the other hand, supply has fallen, as the Covid-19 pandemic has affected production in some mines.
China said earlier this year that it was committed to reducing steel production. But analysts were skeptical, pointing to strong demand and difficulty controlling production.
The Fortescue iron ore mine in Cloudbreak.
Fairfax Media | Getty Images
Fortescue CEO Elizabeth Gaines told CNBC that she continues to see “very strong market conditions” for China’s steel demand.
“Our view is that construction activity will recover in the fourth quarter of this year. We will continue to see that strong construction activities have a strong investment in infrastructure,” he told CNBC on Monday, referring to activity economic in China.
“We know that China is committed to continuing its path of urbanization, which is driving a very strong demand for steel,” he added.
In the first half of 2021, Chinese steel mills produced nearly 12% more crude steel compared to the same period in 2020, according to Wood Mackenzie.
Fortescue plans on green hydrogen
Fortescue will focus on green energy, which the CEO said is expected to reduce costs.
“We are actually at the forefront of decarbonisation, we believe this will reduce our costs, so we are also doing it to reduce our costs and be carbon neutral, which we believe is a really important initiative,” he said. .
Gaines said the firm wants to establish a new green hydrogen export market and aims to generate new profits from these investments. Hydrogen is about to be the next big source of green energy for anything, from data centers and home heating, as well as to powering electric vehicles.
In its profit report, the company said it was reviewing its goal of achieving carbon neutrality by 2030, ten years ahead of the previous target, and said it had made significant progress on the stretch targets. of decarbonization.