CIA vs FMG - EBITDA comparison

There are few pure iron ore companies on the ASX for which to make a comparison.

While FMG has a market cap around 28 times that of CIA & produces 170mtpa of iron ore compared to CIA's current rate of 7.5mtpa, there are enough published figures (actual & projected) to make a comparison of earnings before interest, tax, depreciation & amortisation (EBITDA).

I'm not brave enough to get into Net profit after tax (NPAT) & EPS/PE ratio comparisons as while FMG has all figures published for 1H2018, CIA is harder to calculate due to as yet unpublished first year ongoing CAPEX, sustaining costs, interest payments, taxes etc...

Something that is fairly clear however is that Bloom Lake is considerably more profitable per tonne than Fortescue Metals. I will provide some figures in next post tonight to support this statement but first think more about this.

Despite Bloom Lake's higher production costs - (FMG's C1 costs are the world's lowest) and despite Bloom Lake's huge disadvantage in shipping costs to China - currently elevated at around US$28/t vs US$8/t or less for FMG, Bloom Lake still comes out on top for gross profit/tonne.

This is extraordinary & is simply due to the fact that Bloom Lake's product sells for more than double that of FMG's.

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