For owners of Fortescue Metals Group Ltd (ASX: FMG) shares, the upcoming FY23 result could be very interesting.
The ASX mining share has had a very volatile time over the last several months, as we can see on the chart below.
First, let's look at what we already know.
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Quarterly update
Last month we heard from the business about its quarterly update for the three months to June 2023. With the end of that quarter, Fortescue was able to tell investors about some annual numbers.
It achieved record shipments of 192 million tonnes, which was the top end of its market guidance. Fortescue saw average revenue of US$95 per dry metric tonnes (dmt) for FY23, so we can see it's going to be another solid year of revenue generation.
It also reported that its C1 (production) costs were US$17.54 per wet metric tonne in FY23. From this, and the large gap to its revenue per tonne, we can see Fortescue's profitability is still healthy, which could be key for the Fortescue share price.
Management said that strong cash flow contributed to a cash balance of US$4.3 billion and net debt of US$1 billion at 30 June 2023.
One of the main operational highlights for the business is that Iron Bridge commenced production, which is a large and higher-grade mine, with the first concentrate loaded onto a ship on 24 July 2023.
We also learned that the first battery electric haul truck prototype was delivered to the Christmas Creek site for testing in the Pilbara operating conditions.
Fortescue Future Industries (FFI) also announced a number of positive recent developments. In July 2023, it said the acquisition of the Phoenix Hydrogen Hub in the US was approved, and that the Holmaneset project in Norway was selected by the European Commission as a beneficiary of its Clean Technology Fund.
FFI also noted the expansion of the WAE battery and electric power train production operations in the UK, with a new facility in Oxfordshire.
What could Fortescue report in FY23?
All eyes will be on how much of a profit and dividend the company may deliver.
Commsec numbers currently suggest that the ASX mining share could pay an annual dividend per share of $1.92 for FY23 and an EPS of $2.87. That would put the FY23 price/earnings (P/E) ratio at 7 and the grossed-up dividend yield at 13%.
According to Commsec, the broker Goldman Sachs is expecting Fortescue to generate earnings before interest, tax, depreciation and amortisation (EBITDA) of $10 billion, a net profit of $5.7 billion, EPS of $1.85 and a dividend per share of $1.26. However, it's one of the more pessimistic brokers out there regarding the ASX iron ore share.
Fortescue share price snapshot
Since the start of 2023, both Fortescue shares and the S&P/ASX 200 Index (ASX: XJO) have gone up by just over 3%.
