Fortescue Ltd (FSUMF)

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Fortescue 1st Half Profit Surges On Strong Iron Ore Sales
Fortescue Metals (ASX:FMG)
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2 Months : January 2012 to March 2012

Fortescue Metals Group Ltd. (FMG.AU), one of the world's largest iron ore producers, Wednesday reported a more than doubling of its first-half profit as it continued to ramp up shipments of the steelmaking commodity.

Net profit jumped to US$800.8 million in the six months through December from A$314.1 million a year earlier, while revenue increased 82% to US$3.36 billion from US$2.53 billion.

The Perth-based company said it had declared a half-year dividend of 4 Australian cents a share, compared with a maiden interim dividend of 3 cents a year earlier.

"This record interim profit result sets the foundations for what will be a watershed year for Fortescue," said Neville Power, who took over as chief executive from founder and now Chairman Andrew Forrest in August.

The company said it remained on track to ship 55 million metric tons of iron ore this financial year, despite a cyclone in early January that forced the temporary closure of Port Hedland on Australia's west coast. It said it now expects to ship between 13 million and 13.5 million tons this quarter, rather than the previously forecast 13.75 million.

The cyclone also has delayed work on a fourth berth at Port Hedland which, with the need for additional housing in the area, will mean a cost of about US$200 million, the company said.

Fortescue was formed in 2003 and has quickly grown into the third-largest supplier of iron ore from Australia's remote Pilbara region, which accounts for roughly 40% of the world's trade in the steelmaking ingredient by sea. The company took on large amounts of debt to develop mining operations and build a railway to rival those belonging to Rio Tinto PLC (RIO) and BHP Billiton Ltd. (BHP).

It has plans to invest an estimated US$8.4 billion to boost output to 155 million metric tons a year by mid-2013. Fortescue said that target remains on track.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]

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