Thanks everyone for contributing to such an informative thread,...

Thanks everyone for contributing to such an informative thread, at least most of the time.

I’ve been looking the latest F17 results to estimate FMG revenues and expenses per ton of IO.

This is what I came up with. Obviously increase and decrease in IO price would affect tax rate and expenses but broadly speaking I think the figures per ton give a reasonably good estimate of FMG revenues and costs structure.

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7
0							Per ton of IO
1	Iron Shipped (mt)			170.4​
2	Revenue (US$ millions)		8,447​		$49.57​
3	Underlying EBTIDA (US$ millions)	4,744​		$27.84​
4	Net Profit after income tax (US$ millions)	2,093​		$12.28​
5	Net Cash Flow from Operating Activities (US$ millions)	4,256​		$24.98​
6
7	Total break even price. Revenue minus net profit (US$milllions)	6,354​		$37.29​

Now at last night close of US$76.5 and applying a conservative discount of 25% we get a price of US$57.37 per ton which is about 15.7% above the yearly average $US$ 49.57 achieved in FY17.

Again, applying the 25% discount to the 62%fe Platts benchmark the spot price would need to go below $61 a ton to get below last year’s average.

All in all, FMG is doing very well at the moment even though it seems the market doesn’t believe the good time will last.

It’s very hard to predict the IO future but my hunch is that it will last for quite a while because the demand is strong and the restructuring of the steel mills will support the price of IO.