Fortescue rethinks timeframes for green energy projects, shares drop as profit dips

Fortescue on Thursday reported a drop in first-half profit and said it was reconsidering timeframes for some of its green energy projects as a pause in grants by the United States was leading to funding uncertainty.

The miner also revised its full-year forecast for its green energy unit’s capital expenditure to $400 million from its previously provided forecast of $500 million.

“Market conditions are uncertain, with the Trump Administration instructing federal agencies to pause grant payments under the Inflation Reduction Act,” the company said for its green energy projects.

In July last year, the miner said the unit, Fortescue Energy, was unlikely to meet its target of producing 15 million metric tons of green hydrogen by 2030.

Green iron is produced by reducing iron ore using hydrogen gas, which is then converted into steel in an electric arc furnace.

“Market will want to see Energy capex (capital expenditure) and opex (operating expenditure) cut further,” analysts at Citi said in a note.

The world’s fourth-largest iron ore miner said underlying attributable net profit after tax dropped 53% to $1.55 billion for the six months ended December 31, as prices of iron ore moderated due to weak demand from China’s struggling property sector and high portside inventories.

That missed a Visible Alpha consensus estimate of $1.76 billion.

It also declared an interim dividend of A$0.50 per share, which was 7% lower than the consensus.

Shares of the miner fell 6.7% to A$18.14 in early trading.

Fortescue added its Iron Bridge facility was on track to achieve fiscal 2025 target for shipments of 5 to 9 metric tonnes.

(By Roshan Thomas and Sherin Sunny; Editing by Anil D’Silva)