Fortress Minerals doubles Q2 net profit on strong iron ore sales volume

THE net profit of Catalist-listed Fortress Minerals doubled to nearly US$5.7 million for the second quarter ended Aug 31, from US$2.5 million a year ago on the back of higher sales volume of iron ore.

The healthy sales order books is a signal that demand for iron ore concentrate remains strong, said the group in its financial statements released on Wednesday.

The company recorded earnings per share of 1.14 US cents for the quarter, compared to 0.50 US cent a year ago.

No dividend was declared for the quarter to enable the group to "conserve cash for working-capital purposes and/or other purposes as the board may deem fit at the appropriate juncture", said Fortress Minerals.

Revenue for Q2 was up 66.5 per cent to US$13.0 million from US$7.8 million a year ago. This was due to a 77.5 per cent increase in sales volume with 135,482 DMT (dry metric tonnes) of iron ore sold on the back of strong demand in regional steel mills and an increase in export to China and Vietnam.

However, this was slightly offset by a lower realised selling price of US$95.99/DMT, down US$6.96/DMT from the year-ago period due to pricing discount granted to customers.

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For the half year, Fortress Minerals' earnings doubled to US$7.8 million from US$3.6 million while revenue rose 47.4 per cent to US$20.1 million.

As steel makers seek to reduce their carbon intensity of production, the group foresees higher demand for high-grade iron ore concentrates from regional steel mills. This is because steel makers will start valuing higher-quality ores that raise blast furnace productivity and lower emissions intensity during steel production, said the group.

Shares of Fortress Minerals last traded on Friday at S$0.20.