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Fortress Minerals doubles Q2 net profit on stronger iron ore sales

CATALIST-LISTED Fortress Minerals saw earnings double to US$2.5 million for Q2 FY2020 ended August, bolstered by a higher sales volume and selling price of its high-grade iron ore. 

The company recorded earnings per share of 0.50 US cent for the quarter, compared to 0.29 US cent a year ago. 

Revenue for Q2 was up 18.4 per cent on year to US$7.78 million. This was due to an 11.4 per cent increase in sales volume to over 76,000 DMT, as well as a 13.1 per cent rise in the average realised selling price. The rise in sales volume arose from the company's commissioning of the two additional ball mills in its Bukit Besi mine towards the quarter.

Meanwhile, Fortress Minerals saw margins improve due to a fall in average cost to US$27.78 per WMT, compared to US$35.89 per WMT a year ago. This was driven by cost efficiencies from the two additional ball mills.

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For H1 FY2020, Fortress Minerals' earnings rose 79.8 per cent to US$3.6 million, while revenue doubled to US$13.6 million. It generated US$7.7 million in net cash from operations in H1, up from US$1.6 million a year ago. 

Fortress Minerals remains "cautiously optimistic" on the near- to medium-term outlook for its business, but will continue to develop its processing capacity and mineral resources within its Bukit Besi mine. It also intends to acquire or develop new mines when the opportunity arises. 

"It has been a rollercoaster year for the global seaborne iron ore market. With our consistent efforts in cost control, safety management and efficiency enhancement, we have further improved our operational performance amid iron ore price volatilities," said chief executive Dato' Sri Ivan Chee in a press statement on Wednesday. 

Shares of Fortress Minerals closed flat at S$0.21 on Wednesday, slightly above the S$0.20 offer price of the stock, which listed in March.