Fortress Minerals swings to US$4.9m profit for FY2019 on higher ore prices, demand

SINGAPORE - Recently-listed iron ore producer Fortress Minerals Limited rebounded to a net profit of US$4.9 million for its financial year ended Feb 28, 2019, from a loss of US$411,393 in the prior year.

In its first set of results since its trading debut on the Singapore Exchange's Catalist board on March 27, the company posted earnings per share (EPS) of 1.17 US cents, versus a loss per share of 0.1 US cent in FY2018. Its shares were unchanged at S$0.245 as at 9.26am.

Fortress Minerals said no dividend was declared for FY2019 as the group's restructuring exercise had not yet been completed, and it was not profitable.

With the successful completion of the restructuring exercise during the first quarter of FY2020, the board has declared a one-tier first interim dividend of 0.16 Singapore cent per share for FY2020, amounting to S$800,000 or about 12.1 per cent of the group's FY2019 net profit after tax (NPAT).

This dividend is in addition to the group's intention to further declare dividends of not less than 15 per cent of its NPAT for FY2020. This was previously set out in the group's initial public offering document.

For the year under review, the group reported a revenue of US$20.6 million. No revenue was generated during fiscal 2018 as commercial production at its Bukit Besi mine only commenced in April 2018.

The company's management said the iron ore concentrate industry remained buoyant, especially towards the fourth quarter of 2019 following disruptions to mining infrastructure at major producing countries.

The group said the disruptions resulted in a price increase compounded by heightened demand from China. It said "without doubt", its high grade iron ore concentrate has benefitted from the combined effect of favourable prices and heightened demand.