Fortescue FY19 Results
On 26 August 2019, Fortescue Metals Group (FMG, Company) announced robust results for the full year ended 30 June 2019. Significant improvements in the price of iron ore over the course of the year bolstered earnings and FMG reported a record net profit after tax (NPAT) of USD3.2bn. Revenues for the year increased 45% on FY18 numbers to USD9.97bn due to an increased revenue per tonne of USD65 compared to USD44 in FY18. Underlying EBITDA also improved significantly from FY18 numbers, increasing 90% to USD6.0bn, primarily resulting from higher iron ore price realisations combined with consistent operational cost performance.
The Company reported a USD1bn reduction in net debt compared to the prior corresponding period (pcp). FMG’s gross debt and net debt was USD4.0bn and USD2.1bn, respectively, as at 30 June 2019. Interest expense on borrowings fell 36% from the pcp to USD218m as a result of repayment and refinancing of the debt structure on improved terms which lowered the Company’s overall cost of capital. As at 30 June 2019, FMG had USD1.87bn in cash on hand.
Perenti (Ausdrill) FY19 Results
On 28 August 2019, diversified mining services company Perenti Global (formerly Ausdrill Limited; Perenti) delivered strong results for the full year ended 30 June 2019. FY19 was a transformational year for Perenti as it completed the acquisition of underground mining contractor, Barminco. Proforma revenue for the year was AUD1.97bn, a 14.2% increase on the prior year. Proforma EBITDA also improved significantly on the prior corresponding period (pcp) coming in at AUD415.7m which compared favourably with AUD356.9m in FY18. Perenti’s underlying proforma FY19 results best reflect the position of the new Perenti business and show the underlying results had Perenti owned Barminco and 100 per cent of AUMS for the full 12-month period in FY19.
As at 30 June 2019, Perenti had cash reserves of AUD223.5m. Perenti’s proforma leverage ratio improved slightly over FY19 to 1.3x (30 June 2018: 1.4x).
Rackspace 1H19 Results
On 28 August 2019, Rackspace Hosting Inc (Rackspace, Company) announced 1H19 results for the six months ended 30 June 2019. Rackspace’s recorded revenue of USD1.20bn, slightly weaker than 1H18’s result of USD1.23bn. The Company recorded significant growth in EBITDA to USD 460.9m (1H18), stemming from a USD143.4m unrealised gain from invested capital. Rackspace reported NPAT of USD10.2m, overturning an USD64.0m loss during 1H18. The Company managed to generate USD112m in cash from operations while simultaneously repurchasing USD73.9m of its 8.625% notes due 2024.
Overall results were sound, as Rackspace continues to alter its revenue mix. CEO Kevin Jones continues to target growth in its Managed Public Cloud Services (MPCS), focusing on mid-market clients. Revenue in its MCPS operating segment grew by 40.8% compared to 1H18, stemming from increased customer spend and addition of new customers. Additionally, Apps and Cross Platform revenue grew 14% compared to 1H18 due to the acquisition of RelationEdge (which provides bespoke technology solutions to improve sales).