Fortescue Metals Group Ltd. joined iron-ore mining peers in posting lower profits due to China’s economic downturn, while also announcing the sudden departure of its metals head.
(Bloomberg) — Fortescue Metals Group Ltd. joined iron-ore mining peers in posting lower profits due to China’s economic downturn, while also announcing the sudden departure of its metals head.
The full-year results were announced shortly after Fortescue said Fiona Hick, chief executive officer of the iron ore division, had resigned after less than six months in the role. She was replaced immediately by Dino Otranto, the company’s chief operating officer for iron ore. Fortescue’s shares fell as much as 6% in Sydney.
China’s struggling economy has weighed on demand for the steelmaking material, with Rio Tinto Group, BHP Group Ltd. and Vale SA all reported weaker profits over the past month. Iron ore prices in Singapore have fallen around 16% from a peak in mid-March as optimism over the recovery in Asia’s largest economy dimmed.
Fortescue, the world’s fourth-biggest iron ore producer, said underlying profit fell 11% to $5.52 billion in the 12 months to June 30. One ton of its iron ore fetched $95 per ton on average over the fiscal year, down from $100 the previous year. The Perth-based company will pay a dividend of A$1 per share.
The miner aspires to become a major producer of green hydrogen and other clean-energy technologies and earlier this year was restructured to create two CEO roles, one for the iron ore operations and the other running the new energy arm. Both report to the company’s chairman and founder, billionaire Andrew Forrest.
Read More: Fortescue Iron Ore CEO Fiona Hick Resigns After Brief Tenure
Mark Hutchinson, chief executive officer of the company’s clean energy arm Fortescue Energy, declined to go into the reasons for Hick’s sudden departure.
Her resignation, which continues a run of senior executive departures at Fortescue, was a “mutual decision between Fiona and the board” made on Sunday, he said on an analyst call on Monday. Hick had attended a party to celebrate Fortescue’s 20-year anniversary over the weekend, Hutchinson said.
Fortescue said on Monday it had abandoned an earlier policy of spending 10% of profit on the green energy arm, with metals and energy projects now competing for capital on an equal basis. Capital expenditure for the entire company would be between $2.8 billion and $3.2 billion for the current fiscal year ending June 30, 2024, of which $400 million would go to the clean energy arm, it said.
(Updates throughout with details from call with analysts and media)
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