MELBOURNE, Australia--Fortescue Metals Group Ltd. said it was tracking in line with full-year guidance, with iron-ore shipments in the first quarter steady and production costs reduced to record lows.
The Australian company, the world's No. 4 exporter of iron ore, said it shipped 44 million metric tons of the steelmaking ore in the three months through September, a rise of about 0.5% year-over-year yet down 1.6% on the prior quarter.
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That came despite an about 8% drop on-year in ore mined to 45.7 million tons.
Cash production costs were little changed quarter-on-quarter, but fell 10% to US$12.15 a ton in the recent quarter and Fortescue said it continued to expect costs would be between US$11 and US$12 for the full year.
It has targeted shipments of 170 million tons for the year, steady on the year before.
A focus on productivity and efficiency had offset the impact of exchange rates and increased strip ratios, a measure of the volume of waste materials needed to extract ore, Chief Executive Nev Power said. The rollout of autonomous haulage to the company's Chichester operation and the introduction of a new conveyor system was expected to lead to further improvements from the second half of the fiscal year, he said.
In mid-September, Mr. Power said he would step down in February after almost seven years in the role, since taking over from company founder Andrew Forrest, who became chairman.
The company said Thursday its cash on hand rose to US$2.3 billion over the quarter, with gross debt of US$4.4 billion.
Fortescue borrowed heavily to build a network of mines, rail lines and port infrastructure in Australia's remote Pilbara region in a decadelong quest to break the dominance of Australian rivals Rio Tinto PLC and BHP Billiton Ltd. and Brazil's Vale SA. The company has pushed to repay debt since 2012, when a slide in iron-ore prices forced it into emergency talks with lenders.
In August, the company said it would be more aggressive with dividends, targeting a payout ratio of 50%-80% of net profit, the latest big mining company to reward shareholders as their fortunes have recovered along with a rebound in commodity prices over the last year.
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(END) Dow Jones Newswires
October 25, 2017 19:18 ET (23:18 GMT)