Financial News, Analysis and Data, FNArena

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Equity Bottom-Up

<ul><li>A brief look at important company events and economic data releases next week.</li></ul>

A brief look at important company events and economic data releases next week.

Fortescue Metals Group Ltd - Next Week At A Glance - 28 July-1 Aug 2025

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Fortescue Metals Group Limited's latest earnings report reveals a mix of strategic growth initiatives, operational achievements, and emerging challenges.</li><li>The company has reported its highest-ever first-half shipments of 97.1 million tonnes, underpinning a strong operational performance.</li><li>A significant improvement in safety metrics, namely a 44% improvement in Total Recordable Injury Frequency Rate (TRIFR), further emphasizes Fortescue's commitment to maintaining high safety standards on-site.</li></ul>

Fortescue Metals Group Limited's latest earnings report reveals a mix of strategic growth initiatives, operational achievements, and emerging challenges.The company has reported its highest-ever first-half shipments of 97.1 million tonnes, underpinning a strong operational performance.A significant improvement in safety metrics, namely a 44% improvement in Total Recordable Injury Frequency Rate (TRIFR), further emphasizes Fortescue's commitment to maintaining high safety standards on-site.

Fortescue Metals Group: Initiation of Coverage- Hydrogen Ambitions

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>Jan-Mar 2025 shipments for Australian miners <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">RIO AU</a>, <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP AU</a>, and <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">FMG AU</a>  were sluggish, registering -9.3%,-4.3%, and 0.4% YoY, respectively, due to inclement weather.</li>
<li>
<a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> shipments were comparatively better, up 3.6% YoY to 66.1 mn tons. The big four kept their annual production guidance intact. </li>
<li>Positive news came from Vales China clients, as blast furnace utilization passed 90%, and some mills are now making cash profits of 200 RMB/ton. </li>
</ul>


Jan-Mar 2025 shipments for Australian miners RIO AU, BHP AU, and FMG AU  were sluggish, registering -9.3%,-4.3%, and 0.4% YoY, respectively, due to inclement weather.

Vale (VALE US) shipments were comparatively better, up 3.6% YoY to 66.1 mn tons. The big four kept their annual production guidance intact. 
Positive news came from Vales China clients, as blast furnace utilization passed 90%, and some mills are now making cash profits of 200 RMB/ton. 


Gleanings From The Q1 CY25 Shipments Conference Calls Of Vale, Rio, BHP, and FMG

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> announced disappointing results, with revenues/profits down 16%/53% YoY, disappointing consensus slightly by 4-5%. </li>
<li>Capex accelerated to 3.5-3.8 bn USD annually, vs the initial 3.2-3.5 USD. The company reduced its decarbonization capex to 400-500 mn USD from the initial &gt;700 mn USD. </li>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a>  dividend payout ratio has reverted to its base level of 65%, yielding a modest 5.3% based on H1FY25's 50-cent distribution.</li>
</ul>



Fortescue Metals (FMG AU) announced disappointing results, with revenues/profits down 16%/53% YoY, disappointing consensus slightly by 4-5%. 
Capex accelerated to 3.5-3.8 bn USD annually, vs the initial 3.2-3.5 USD. The company reduced its decarbonization capex to 400-500 mn USD from the initial &gt;700 mn USD. 

Fortescue Metals (FMG AU)  dividend payout ratio has reverted to its base level of 65%, yielding a modest 5.3% based on H1FY25's 50-cent distribution.


Fortescue Metals Group (FMG AU): The Thrill Is Gone, And So Has The Dividend

<ul>
<li>We like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. </li>
<li>The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. </li>
<li>The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). </li>
</ul>


We like Vale (VALE US) for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. 
The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. 
The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). 


VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

Australia

Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.

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Fortescue Metals (FMG AU)

Fortescue Metals Group Ltd - Next Week At A Glance - 28 July-1 Aug 2025

A brief look at important company events and economic data releases next week.

FNArena

Fortescue Metals Group: Initiation of Coverage- Hydrogen Ambitions

Fortescue Metals Group Limited's latest earnings report reveals a mix of strategic growth initiatives, operational achievements, and emerging...

Baptista Research

Gleanings From The Q1 CY25 Shipments Conference Calls Of Vale, Rio, BHP, and FMG

We update the operational/shipment performance of the iron ore majors and outline the importance of tracking their numbers.

Sameer Taneja

Fortescue Metals Group (FMG AU): The Thrill Is Gone, And So Has The Dividend

We summarize the results of FMG AU for H1 FY25 and our gleanings from the conference call on the 20th of Feb. Based on the current payout of 65%,...

Sameer Taneja

VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

We initiate coverage on VALE US, one of the world's biggest iron ore producers, with high-grade iron ore and low-cost production. The stock trades...

Sameer Taneja

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