Fortress Minerals Limited (SGX: OAJ): 3Q FY2026 Financial Results Review

Fortress Minerals Limited, a Singapore-listed miner primarily focused on iron ore, has released its unaudited financial results for the third quarter and nine months ended 30 November 2025. This review highlights the company’s key financial metrics, analyzes performance trends, and discusses factors impacting the business and outlook.

Key Financial Metrics and YoY/QoQ Comparisons

*Inferred from 9M figures minus 1Q and 3Q, as detailed quarterly data is not provided for 2Q.

Historical Performance Trends

• Revenue Growth: Revenue for 3Q FY2026 rose by 41.4% YoY, driven by a 43.8% increase in iron ore sales volume. This was attributed to resilient demand in both local and export markets, despite a slight dip in average realized selling price per DMT (down 1.9% YoY).
• Profitability Surge: Net profit jumped more than sixfold YoY, with EPS up 553.8%. Gross profit margin expanded significantly due to lower unit costs from economies of scale.
• Cost Control: The average unit cost of sales dropped by 24.4% YoY, reflecting improved operational efficiency as production volumes rose.
• Dividend Policy: No interim dividend was declared for 3Q FY2026. The most recent dividend was a final FY2025 payout of 0.36 US cents per share.

Exceptional Items and Noteworthy Expenses

• Other income increased due to foreign exchange gains from the strengthening of the Malaysian ringgit against the US dollar.
• Administrative expenses decreased slightly due to cost controls, while selling/distribution costs rose in line with higher sales volume and associated royalties/transport costs.
• Fair value loss recognized on derivative financial instruments (free options from an ASX investment) impacted profit, but was not material relative to overall earnings.
• Employee benefits (directors and key management) for 9M FY2026 totaled \$3.4 million, unchanged YoY.

Balance Sheet and Cash Flow Position

• Assets: Total assets increased to \$120.3 million, up \$17.1 million from end-FY2025, reflecting investments in exploration, property, plant, and equipment.
• Liquidity: Cash and bank balances stood at \$10.2 million, with a strong working capital position (\$15.6 million positive).
• Capital Expenditure: Significant ongoing capex in plant, equipment, and exploration, including the development of a new integrated processing plant and acquisition of mining rights.
• Leverage: Total borrowings rose due to drawdown of bank facilities for expansion, but remain manageable given the Group’s profitability and cash generation.

Operational and Market Developments

• Fortress completed a new crushing plant at the Bukit Besi mine and is progressing towards an integrated processing facility, expected to further boost operational efficiency and support new offtake agreements.
• The Group is constructing a pilot plant at the CASB mine for iron ore, copper, and pyrrhotite concentrate production.
• Strategic investments included acquiring a 49% stake in Sebanjar Bina Sdn. Bhd. and a new equity interest in Norwest Minerals Ltd (ASX-listed).
• Exploration activities continue at Bukit Besi and Fortress Mengapur Group tenements. Prospecting in Sabah remains on hold pending licence renewals.

Macroeconomic and Industry Factors

• Global steel production declined 2% YoY (Jan-Nov 2025), with China’s output down 4% but India’s up 10%.
• China’s steel demand remains weak amid property sector issues, but the Group expects demand for high-grade iron ore to remain resilient, supported by infrastructure and industrial activity in ASEAN and India.
• Malaysia’s domestic economy is expected to remain on a steady growth path, supporting Fortress’ core market.

Corporate Actions and Related-Party Transactions

• No share buybacks, placements, or dilutive events occurred during the period.
• No interested person transactions or treasury shares as of the reporting date.
• Directors’ and key management remuneration is disclosed, with no material change YoY.

Divestments, Fundraising, and Asset Sales

• No major divestments or IPOs reported.
• Placement proceeds from 2023 (S\$8.7 million) have been largely deployed for mine development and exploration, with a small balance remaining in interest-bearing deposits.

Unusual Items and Exceptional Earnings

• There was a substantial spike in profit and EPS, mainly due to higher sales volume, lower unit costs, and favorable foreign exchange movements.
• No errors, inconsistencies, or asset revaluation delays were noted.

Outlook

Fortress Minerals expects continued resilience in demand for its high-grade iron ore, underpinned by regional infrastructure activity and a focus on decarbonization in the steel sector. The company is also actively expanding its commodity portfolio through strategic investments and new developments. Management remains vigilant about China’s policy shifts, global steel demand, and input cost pressures.

Chairman’s Statement

“Building on this strong foundation, the Group is entering a new phase of strategic growth… Fortress is actively expanding into the exploration and development of other strategic and critical minerals, in line with global sustainability priorities and evolving market demands… Fortress is guided by core values of integrity, sustainability, empowerment, and prosperity, with a steadfast commitment to the safety and development of its people. Our team drives the business towards our vision of excelling in mineral exploration through strategic insights and alliances, addressing regional client demands, and maintaining ethical excellence.”

The Chairman’s tone is optimistic and forward-looking, highlighting the Group’s expansion strategy, focus on sustainability, and commitment to operational excellence.

Conclusion and Recommendation

Overall Assessment: Fortress Minerals delivered a strong set of results in 3Q FY2026, with substantial YoY and QoQ growth in revenue, profit, and EPS. The Group’s operational efficiency and prudent cost management led to a notable improvement in margins. Fortress maintains a healthy balance sheet, robust cash flow, and a positive working capital position, while executing on its strategic expansion and development plans.

• If you are currently holding the stock: The company’s strong results, disciplined capital allocation, and positive outlook suggest maintaining your position. The absence of an interim dividend is a minor negative, but reflects management’s focus on funding growth. Investors should continue to monitor commodity price trends and China’s steel policy developments for potential impact.
• If you are not holding the stock: Fortress Minerals presents a compelling growth story, backed by solid fundamentals, a strong balance sheet, and exposure to regional industrial activity. Investors seeking exposure to iron ore and resource expansion in ASEAN may consider accumulating on price weakness, while monitoring execution risks and market volatility.

Disclaimer: This analysis is based solely on the information contained in the company’s published financial statements and does not constitute investment advice. All investments carry risk. Please conduct your own due diligence or consult a licensed financial advisor before making investment decisions.

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