(Bloomberg) -- Fortescue Ltd.’s first-half profit surged 41%, beating estimates and bucking a trend of declining earnings among the world’s biggest miners.

The Australian company — which is attempting to transform itself into a producer of clean fuels, particularly green hydrogen — still gets almost all of its revenue from iron ore, prices of which were relatively resilient during the half. That propped up its earnings compared with more diversified rivals such as BHP Group Ltd. and Rio Tinto Group, which were impacted by weak margins for metals like nickel, copper and aluminum.

Fortescue’s revenue from iron ore jumped 24% to $8.71 billion in the six months through December, while deliveries of the steelmaking material were slightly below last year’s record for the period. Chinese steelmakers largely maintained production rates during the half, despite a wider economic slowdown, helping support prices of the steelmaking ingredient. 


The miner reported net income of $3.34 billion for the period. Fortescue will pay an interim dividend of A$1.08 ($0.71) per share, up 44% from the year before, it said in a statement on Thursday. Its shares rose as much as 3.2% in Sydney after the results were announced, before closing up 2.1% at A$27.83.

While iron ore prices were relatively strong in the latter part of last year, prices have slumped this week. There is growing concern that Chinese steel demand is weakening, with the property sector still struggling with a yearslong downturn. 

“Every year after the Chinese New Year we see some short-term volatility — this year we’ve had the same,” Dino Otranto, the chief executive officer of Fortescue Metals Group Ltd., said in a Bloomberg Television interview after the announcement. “Overall, the price support is extremely robust.”

Fortescue’s first-half capital expenditure was $1.5 billion, including $1.13 billion on sustaining current iron ore activities and hub development. It spent $269 million on decarbonization and energy projects.

The results come after larger iron ore mining rivals reported their earnings this week. Rio Tinto’s underlying profit fell 12% last year on weaker commodities prices and rising costs, but the company still managed to pay a higher dividend. BHP’s first-half net income slumped 86% from the year before after writing down the value of its Australian nickel assets.

The companies have different approaches to the energy transition. Fortescue has allocated 10% of its iron ore profits to hydrogen development, and has ramped up exploration activities across Western Australia in its search for copper, rare earths and lithium.

BHP, meanwhile, has been hit hard by the crash in nickel prices but remains confident that its potash and copper investments will prove fruitful. Rio Tinto has a focus on copper and is also pursuing lithium opportunities. 

Led by Australia’s richest person, Chairman Andrew Forrest, Fortescue has announced a string of projects and an expansion into asset management. 

The company made a positive final investment decision on $750 million worth of green hydrogen projects over the next three years. It’s yet to announce FIDs for proposed hydrogen developments in Brazil, Norway and Kenya. However, it’s been hit by a slew of senior departures that have highlighted concerns around the scale of its ambitions.

Fortescue is confident its trial green-steel plant in the Pilbara will be producing “commercial volumes” of the decarbonized product by the end of 2025, Otranto said.

(Updates with CEO comments from interview in 6th, final paragraphs)

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