Fortescue Records Net Loss for September Quarter

Submitted by Jim Thesiger on 19 October, 2009 - 04:54

Iron ore exploration company Fortescue Metals Group (FMG) has posted a $US18 million worth of net loss for the September quarter following the adjustments for note liability and foreign exchange. It is to be mentioned that the company switched to U.S. dollar for reporting from AUS in 2009. Fortescue stated that the profit was compared with a restated profit of the corresponding period of the earlier year which was $US99 million. An $US68 million rise in the value of its Leucadia Note liability and a foreign exchange adjustment of $US25 million influenced the result to some extent, the company authority added.

The company gross profit also fell from restated $US249.4 million to $US151.6 million in September. The forecast of an independent expert regarding a climb in the future prices led to an increase in estimated liability. Fortescue surpassed expectations for its shipped iron ore in the September quarter and assumed that the market for the valuable commodity would stiffen. 9.53 million tonnes of iron ore was shipped by the West Australian miner in three months till the end of September where in June quarter the amount was 7.98 million tonnes. The production was 38Mt per annum on the annualised basis in comparison to a year forecast of 35Mt.

Fortescue was looking forward to spend $360 million to boost up its production passing the 50Mt per annum mark through an upgrade of the Christmas Creek mine. The miner posted an annual profit of $US508.04 million in August for the year ended in June 30. The Fortescue authority made an announcement in the earlier week that it is holding talks about selling Korean and Japanese mills in an attempt to take market share from the two mining giants- BHP Billiton and Rio Tinto. Executive director of the company Graeme Rowley is hoping to see positive outcomes from the discussion.