Fortescue Fourth-Quarter Iron Ore Shipments Miss Estimates

Fortescue Metals Group Ltd., Australia’s third-biggest iron ore producer, said fourth-quarter shipments rose 39 percent, missing analyst estimates.

Shipments were 23.9 million metric tons in the three months ended June 30, compared with 17.1 million tons a year earlier, Perth-based Fortescue said today in a statement. That compares with the median estimate of 24.6 million tons of four analysts surveyed by Bloomberg.

Fortescue, which sold $5 billion in loans to cut debt after prices fell last year, is aiming to boost capacity to 155 million tons. The company started talks in December for the sale of its port and railroad assets, which could raise an estimated $3 billion, according to JPMorgan Chase & Co.

The stock fell 1.6 percent to A$3.62 at the close of trade in Sydney. The benchmark S&P/ASX 200 Index gained 0.3 percent.

Talks are continuing for a sale of a minority stake in the port and rail unit, Fortescue said in the statement. The company plans to use cash from a sale to repay debt.

Strong Position

A weaker Australian dollar, the company delivering its projects on time and on budget and a strong demand outlook were strengthening Fortescue’s financial position, Chief Executive Officer Neville Power, said on a call with reporters.

“We’ve always said, we don’t need to do this transaction,” he said. “We’re achieving our expansion projects on schedule and on cost, and that’s being reflected now in the increasing cash flows and reducing net debt.”

Fortescue last month said it needed more time to study offers for the assets because of the level of interest received, delaying a result of the talks to the September quarter from the end of June. Iron ore prices dropped to a three-year low in September. They have regained 51 percent since.

Rail operator Brookfield Infrastructure Partners LP has left the bidding process, joining Australia’s biggest haulage provider Aurizon Holdings Ltd. in dropping out, the Australian Financial Review reported June 22, without saying where it got the information.

Before it's here, it's on the Bloomberg Terminal.