Australia's Fortescue posts record profit, hikes dividend on China demand

Credit: REUTERS/© David Gray / Reuters

Fortescue Metals Group posted a record full-year profit and quadrupled its final dividend on Monday, helped by robust iron ore output and firm prices on the back of Chinese appetite for the steelmaking ingredient.

Adds details on dividend, guidance, background

Aug 24 (Reuters) - Fortescue Metals Group FMG.AX posted a record full-year profit and quadrupled its final dividend on Monday, helped by robust iron ore output and firm prices on the back of Chinese appetite for the steelmaking ingredient.

Demand from China, the world's biggest importer of iron ore, recovered as Beijing ramped up infrastructure spending to tackle a coronavirus-induced economic slump, boosting prices of the commodity despite weak demand in much of the rest of the world.

The firm pricing, along with better-than-expected annual iron ore shipments reported last month, fuelled a near 70% surge in Fortescue's shares this year and stoked expectations for a bumper final dividend payout.

The world's fourth-biggest iron ore miner said net profit for fiscal 2020 was $4.74 billion, up 49% from $3.19 billion a year ago. Analysts on average were expecting a figure of $4.77 billion, according to Refinitiv IBES data.

The company declared a final dividend of A$1 per share, a sharp jump from the A$0.24 per share it paid last year.

With the final payout, total dividends for the year stood at A$1.76 per share, a 54% jump over the previous year, representing 77% of the company's full-year profit after tax - at the upper end of its payout policy of up to 80%.

The company reaffirmed its earlier fiscal 2021 iron ore shipments and capital expenditure and cost guidance.

(Reporting by Rashmi Ashok in Bengaluru; Additional reporting by Anushka Trivedi; Editing by Richard Pullin)

((Rashmi.Ashok@thomsonreuters.com; +918061822604;))

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