Fortescue misses FY guidance

Miner falls short of full-year shipments guidance, despite record Q4 performance.

The successful ramp-up of the Kings Valley project and record shipments in the fourth quarter were not enough for Fortescue Metals Group to reach its full-year shipments guidance.

In the June quarter, Fortescue's total ore shipped, which includes third party tonnes, was a record 38.7 million tonnes, a 55% increase on the 25 million tonnes shipped in the June 2013 quarter.

This brought full-year shipments to 124.2 million tonnes, a 53% increase on the previous year, but slightly below the miner's full-year guidance of 127 million tonnes.

Fortescue ore shipped was 37.6 million tonnes in the quarter, 58% higher than the 23.9 million tonnes in the previous corresponding quarter and slightly shy of analyst expectations at 38.3 million tonnes.

Ore mined in the quarter was 43.8 million tonnes, 28% higher than the 34.3 million tonnes mined in June 2013.

Fortescue -- which has a break-even price of $US72 a tonne for iron ore -- noted the recent iron ore price volatilty, saying it reflects the significant increase in new seabourne iron ore supply, tighter credit conditions in China and relatively high Chinese port stocks.

However, the miner said it expects supply to re-balance in the short term as port inventories are drawn down, steel mills re-stock and higher cost iron ore production leaves the market.

C1 costs for the quarter were $US34.03 per wet metric tonne, which contributed to a $US33.84 per wet metric tonne C1 cost for the full-year, a 23% reduction on the previous financial year and below guidance.

Fortescue said it had cash on hand of $US2.4 billion ($A2.55 billion) at the end of the financial year, reflecting the continued strength of operational cashflows, reduced capital expenditure and lower finance costs.

Net debt at June 30 was $US7.2 billion.

Capital expenditure in fiscal 2014 was $US1.9 billion, slightly below guidance due to the deferral of approximately $US100 million worth of expenditure into fiscal 2015.

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