Fortress Minerals has reported earnings of US$2.8 million ($3.8 million) for the 3QFY2021 ended Nov 30, 2021.

Earnings per share (EPS) for the quarter stood at 0.57 cents, down 34.5% y-o-y from 0.87 cents during the same period last year.

However, revenue for the 3QFY2021 grew 7.5% y-o-y to US$11.0 million on the back of higher sales volume.

In the 3QFY2021, sales volume grew 35.3% y-o-y to 126,131 dry metric tonnes (DMT), reflecting resilient demand from regional markets and higher production volume achieved.

 

The increase was partly offset by a lower average realized selling price of US$87.44 per DMT, which fell 20.6% y-o-y due to the weakening of the average benchmark IODEX CFR North China of Platts Daily Iron Ore Assessments.

The group&rsquo s average unit cost of sales fell 20.0% y-o-y to US$20.22/wet metric tonne (WMT), which was bolstered by higher production volume of 138,771 WMT during the quarter.

Gross profit for the 3QFY2022 stood 6.6% y-o-y higher at US$8.2 million, which is reflective of the higher volume sold.

 

The group&rsquo s other operating income inched up to US$0.3 million from US$0.2 million in the 3QFY2022 mainly due to an increase in unrealised foreign exchange gain on the back of the weakening of the exchange rate movement of USD against the Malaysian ringgit.

 

During the quarter, selling and distribution expenses increased by US$1.5 million to US$2.1 million in the 3QFY2021 due to the addition of ocean freight charge for export sales of US$1.0 million.

 

Other operating expenses also grew to US$2.2 million from US$0.5 million.

 

Earnings for the 9MFY2021 improved by 9.5% y-o-y to US$13.3 million, while EPS stood 9.4% y-o-y higher at 2.67 cents from 2.44 cents in the year before.

9MFY2021 revenue grew 25.5% y-o-y to US$38.1 million due to a 4.1% increase in volume to 315,977 DMT and strong average realised selling price of iron ore during the period.

 

According to the group, sales volume is expected to remain strong and be well-supported by its new 15-month offtake agreement announced in October 2021 to deliver 375,000 WMT to a third-party domestic steel mill in Malaysia.

As at Nov 30, 2021, cash and cash equivalents stood at US$10.2 million.

 

No dividend has been declared for the period.

Fortress Minerals

 

Between Dec 9 and 10, Fortress Minerals $ FortressMinerals: OAJ -2.44% non-executive and non-independent director Teh Lip Kim acquired 500,000 shares of the Catalist-listed company at an average price of 40.6 cents per share.

 

With a consideration of S$203,000 this increased Teh' s direct interest in the explorer, miner, producer, and seller of iron ore concentrate from 0.20 per cent to 0.30 per cent.

 

This followed her acquisition of 300,000 shares at an average price of 38.5 cents per share on Dec 7, and 300,000 shares at an average price of 38.0 cents per share between Nov 30 and Dec 1.

 

Teh also maintains a 33.29 per cent deemed interest in Fortress Minerals which takes her total interest to 33.59 per cent.

 

On Dec 7, Fortress Minerals non-executive and non-independent director Teh Lip Kim acquired 300,000 shares of the Catalist-listed company at an average price of 38.5 cents per share.

 

With a consideration of S$115,500 this increased Teh' s direct interest in the explorer, miner, producer, and seller of iron ore concentrate from 0.14 per cent to 0.20 per cent.

 

This followed her acquisition of 300,000 shares at an average price of 38.0 cents per share between Nov 30 and Dec 1.

 

Teh also maintains a 33.29 per cent deemed interest in Fortress Minerals which takes her total interest to 33.49 per cent.

 

Between Nov 30 and Dec 1, Fortress Minerals $ FortressMinerals: OAJ 0% non-executive and non-independent director Teh Lip Kim acquired 400,000 shares of the Catalist-listed company at an average price of 38.0 cents per share.

 

With a consideration of S$152,000 this increased her direct interest in the explorer, miner, producer, and seller of iron ore concentrate from 0.10 per cent to 0.18 per cent.

 

She also maintains a 33.29 per cent deemed interest in Fortress Minerals which takes her total interest to 33.47 per cent.

 

Teh was appointed to the board of Fortress Minerals in February 2019.

 

She is presently the managing director and substantial shareholder of Selangor Dredging, a property development company listed on Bursa Malaysia and the holding company of SDB Mining, a controlling shareholder of Fortress Minerals.

 

On Oct 8, Fortress Minerals reported revenue of US$27.3 million for its H1FY22 (ended Aug 31), a year-on year increase of 35.8 per cent, driven by higher average realised selling price which was up by 49.1 per cent year on year, underpinned by a robust pricing environment.

Fortress Minerals also reported increased bank borrowings of US$22.9 million for the 2QFY2022 due to the acquisition of Fortress Mengapur.

 

The higher net debt presents another negative on the counter, according to Ye.

 

As at 10.31am, shares in Fortress Minerals are trading 1.5 cents lower or 3.45% down at 42 cents.

 

 

 

IRON ore concentrate producer Fortress Minerals has entered into a new 15-month offtake agreement with a third-party domestic steel mill in Malaysia.

 

Fortress Minerals' subsidiary will deliver about 375,000 wet metric tonnes of iron ore from Oct 11, 2021 to Dec 31, 2022, to the steel mill under the latest agreement.

 

In a bourse filing on Tuesday (Oct 12), the board said the new offtake deal will provide recurrent income and cash flows to the group as well as strengthen its financial position.

 

It will also ensure that the group remains well-placed to execute its growth plans and provide long-term value to shareholders, the board added.

 

Fortress Minerals expects the new agreement to contribute positively to the group' s earnings per share for the financial year ending Feb 28, 2022.

 

The deliverables are subject to a variance of an additional 30 per cent or a reduction of 10 per cent at the option of the Fortress Minerals subsidiary.

 

The selling price will be based on the same formula used in the previous one-year offtake deal. The formula is guided by, among other things, the daily price index for 65 per cent Fe CFR North China published by S& P Global Platts.