Fortress Minerals has reported earnings of US$2.8 million ($3.8 million) for the 3QFY2021 ended Nov 30, 2021.
Earnings per share (EPS) for the quarter stood at 0.57 cents, down 34.5% y-o-y from 0.87 cents during the same period last year.
However, revenue for the 3QFY2021 grew 7.5% y-o-y to US$11.0 million on the back of higher sales volume.
In the 3QFY2021, sales volume grew 35.3% y-o-y to 126,131 dry metric tonnes (DMT), reflecting resilient demand from regional markets and higher production volume achieved.
The increase was partly offset by a lower average realized selling price of US$87.44 per DMT, which fell 20.6% y-o-y due to the weakening of the average benchmark IODEX CFR North China of Platts Daily Iron Ore Assessments.
The group’s average unit cost of sales fell 20.0% y-o-y to US$20.22/wet metric tonne (WMT), which was bolstered by higher production volume of 138,771 WMT during the quarter.
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Gross profit for the 3QFY2022 stood 6.6% y-o-y higher at US$8.2 million, which is reflective of the higher volume sold.
The group’s other operating income inched up to US$0.3 million from US$0.2 million in the 3QFY2022 mainly due to an increase in unrealised foreign exchange gain on the back of the weakening of the exchange rate movement of USD against the Malaysian ringgit.
During the quarter, selling and distribution expenses increased by US$1.5 million to US$2.1 million in the 3QFY2021 due to the addition of ocean freight charge for export sales of US$1.0 million.
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Other operating expenses also grew to US$2.2 million from US$0.5 million.
Earnings for the 9MFY2021 improved by 9.5% y-o-y to US$13.3 million, while EPS stood 9.4% y-o-y higher at 2.67 cents from 2.44 cents in the year before.
9MFY2021 revenue grew 25.5% y-o-y to US$38.1 million due to a 4.1% increase in volume to 315,977 DMT and strong average realised selling price of iron ore during the period.
According to the group, sales volume is expected to remain strong and be well-supported by its new 15-month offtake agreement announced in October 2021 to deliver 375,000 WMT to a third-party domestic steel mill in Malaysia.
As at Nov 30, 2021, cash and cash equivalents stood at US$10.2 million.
No dividend has been declared for the period.
In its outlook statement, the group says it remains optimistic on its prospects for the demand of iron ore concentrate from regional steel mills.
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It adds that its iron ore production and sales remain strong with its growth prospects “well-supported” by efforts to invest in growing its portfolio sustainably.
“Our disciplined cost management practices, commitment to invest in strategic assets, and strong relationships in the region have continued to enable us to leverage on our quality assets to deliver a resilient set of results for 9MFY2022,” says Dato’ Sri Ivan Chee, executive director and CEO of Fortress Minerals.
“We look forward to bringing production at the Cermat Aman Sdn Bhd (CASB) mine to commencement in the first quarter of the financial year ending Feb 28, 2023 (1QFY2023) and focusing on our cost control measures, which will allow us to remain resilient and support our growth. Strict safety protocols also remain a priority to ensure continued operational excellence as economic activity resumes normalcy in Malaysia and the country’s growth prospects improve,” he adds.
Shares in Fortress Minerals closed flat at 41 cents on Jan 12.
