Fortress Minerals on July 14 announced that its 1QFY2022 ended May results, which saw earnings coming in at a record US$7.2 million ($9.8 million), some 233.6% higher than US$2.2 million the same period a year ago.
This came on the back of a 143.8% surge in revenue to US$17.3 million, due mainly to higher sales demand and higher average realised selling price of iron ore.
Sales volume continued to grow positively in 1QFY2022 with 120,665 DMT of iron ore sold, an increase of 61.6% compared to 1QFY2021, reflecting good demand from regional steel mills customers and reliable productivity performance achieved.
The group’s average realised selling price increased by US$48.03/DMT to US$143.00/DMT in 1QFY2022 primarily due to higher average benchmark IODEX CFR North China of Platts Daily Iron Ore Assessments price indices throughout 1QFY2022 as compared to 1QFY2021.
As cost of sales only saw a 65.1% y-o-y increase to S$3.4 million, gross profit for 1QFY2022 came in at US$13.9 million, 175.7% higher than US$5.0 million last year.
Overall, expenses also increased y-o-y, with selling and distribution expenses increasing by 209.8% y-o-y to US$1.7 million; other operating expenses grew by 77.3% y-o-y to US$2.5 million; administrative expenses increased by 90.7% y-o-y to US$0.4 million; and finance costs were 213.9% higher at US$31,955.
As at end-May, the group’s cash and cash equivalents stood at US$12.9 million.
Ivan Chee, executive director and CEO of Fortress Minerals says, “The team has performed extremely well to deliver yet another record quarter for Fortress Minerals. In 1QFY2022, we endeavoured to outperform on sales volumes while keeping strong operating profits. We have continued to demonstrate the resilience of our business model by achieving excellent margins, exceptional underlying earnings, and strong cash flows.”
“Following the Ministry of International Trade and Industry’s decision to reopen most sectors in several states where the Group operates in, the group’s mining and production operations have gradually returned to normalcy since July 5. We remain highly committed to protecting the health and wellbeing of our workforce during the ongoing Covid-19 pandemic as we get back on track to continue to meet the strong demand from our customers.”
On the outlook, the group remains positive on the demand for iron ore as global economic recovery continues, supported by the scale of stimulus that has been deployed by policy makers, in addition to governments focusing on infrastructure spending to stimulate the economy.
Shares in Fortress Minerals closed at 63 cents on July 14.
