Iron ore prices boost profits as ASX earnings season gets underway
Fortescue announced a monster interim dividend for shareholders
2 min
ASX earnings season is well underway, with hundreds of Australia’s biggest publicly–listed companies reporting their latest financial results to the market. This week, the country’s three biggest miners, BHP, Fortescue and Rio Tinto released their figures. All three companies benefitted from stronger iron ore prices, however weaker prices for other commodities put a drag on earnings for diversified operators, BHP and Rio Tinto, while iron ore pure-play Fortescue delivered a turbocharged profit.
Let’s review the key points of each company’s report.
BHP Group Ltd (ASX: BHP)
BHP released its half-year figures for FY24 on Tuesday. The company reported a 6 percent revenue increase to US$27.2 billion. Its underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) lifted 5 percent to US$13.9 billion but profit after tax spiralled by 86 percent to US$927 million.
BHP said higher iron ore and copper prices along with production from mines acquired under the Oz Minerals takeover in May 2023 boosted revenue. But its profit was impacted by a US$2.5 billion impairment of the carrying value of its West Australian nickel business and a US$3.2 billion provision for reparations and compensation relating to the Brazil dam disaster in 2015. The BHP share price fell 1.54 percent on Tuesday, and is down a further 2.57 percent since. BHP closed yesterday at $44.30.
BHP shares will pay a fully franked interim dividend of 72 US cents per share, which is 20 percent lower than last year.
Fortescue Ltd (ASX: FMG)
Fortescue released its results yesterday, reporting a 21% revenue bump to US$9.5 billion for1H FY24. Underlying EBITDA came in 36% higher at US$5.9 billion and net profit after tax was up 41 percent to US$3.3 billion.
Higher iron ore prices turbocharged Fortescue’s revenue during the period. The company delivered its second–highest number of shipments for a first half ever, including first shipment from the new Iron Bridge project. The Fortescue share price lifted 1.73 percent yesterday to $27.83per share.
Fortescue shares will pay a fully franked interim dividend of AU$1.08 per share, up 44 percent on last year.
Rio Tinto Ltd (ASX: RIO)
Rio Tinto reports on a different financial year cycle to the other two majors, and released its full-year earnings for FY23 yesterday. Revenue fell 3 percent over the year to US$54 billion. Rio’s underlying EBITDA was 9 percent lower at US$23.8 billion and profit after tax declined 19 percent to US$10 billion.
The company said its iron ore division delivered increased revenue and EBITDA due to higher commodity prices, however, this was offset by higher costs and weaker prices for copper, aluminium, diamonds and other minerals due to lower global demand amid increased supply. The Rio Tinto share price fell 0.96 percent yesterday to $124.36 per share.
Rio Tinto shares will pay a fully franked final dividend of US$2.58 per share for 2H FY23, up 14 percent.
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Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market. The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index. …
Continue reading “ASX falls 0.7 per cent as miners and property stocks retreat”
2 minAustralian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market.
The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index.
Energy was the notable exception, gaining more than one per cent as Brent crude traded above US$103 a barrel. Oil had moved higher amid uncertainty surrounding potential US diesel-export restrictions and broader geopolitical supply risks. The move supported energy producers but renewed concern about inflation inputs across transport and the wider economy.
Gold shares were weak even as spot bullion remained historically elevated. The All Ordinaries Gold index fell about 2.25 per cent, showing that equity performance can diverge from the commodity because of valuation, currency, operating and company-specific factors.
Zip was a prominent loser, falling 11.38 per cent after the company reported short sales after the previous close. Nine Entertainment also weakened after UBS analysts warned of near-term revenue challenges associated with its advertising-supported subscription tier.
Premier Investments led larger winners despite caution about the retail environment. Breville, in which Premier owns a significant stake, also appeared among leading movers. In the broader ASX 300 screen, Myer gained 11.43 per cent and MAAS Group rose 7.93 per cent, while Lotus Resources fell 10.53 per cent. These percentage moves should be checked against company announcements and trading liquidity before attributing causes.
The Australian dollar was broadly flat at US70.38 cents. Spot gold was around US$4,280 an ounce, Brent crude approximately US$103.08 a barrel and iron ore near US$96.90 a tonne late in the session.
The rate outlook remains the central domestic catalyst. Labour-market weakness has not eliminated the possibility of an RBA increase next week, leaving banks, listed property and other rate-sensitive sectors exposed to changing expectations.
Market dashboard
S&P/ASX 200: 8,702, down 0.72 per cent.
All Ordinaries: 8,897, down 0.66 per cent.
Best sector: Energy, up more than one per cent.
Weakest areas: Real estate and materials were the major drags; confirm final sector percentages before publication.
Material winner: Premier Investments led the large-company gainers. Confirm its final closing move from the ASX before publication.
Material loser: Zip, down 11.38 per cent.
ASX 300 percentage leader: Myer, up 11.43 per cent.
ASX 300 percentage laggard: Zip, down 11.38 per cent.
AUD/USD: Approximately US$0.7038, broadly flat.
Queensland-based builder-developer MAYD has unveiled an exclusive first look at its anticipated ultra-luxury North Kirra mixed-use project as it lodges a minor amendment with the City of Gold Coast Council. The project sits across a 4,742sqm amalgamated landholding spanning seven parcels at 2–6 Pacific Parade and 27–33 Golden Four Drive, Bilinga, which MAYD secured in …
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