* Profit at $3.19 bln, vs $1.08 billion last year
* Profit slightly beats consensus of $3.03 billion
* CEO says demand remains strong, cites China investment (Adds analyst, CEO comment, details)
By Melanie Burton
MELBOURNE, Aug 26 (Reuters) - Iron ore miner Fortescue Metals Group on Monday posted a record profit and bumper dividend, and said it was still seeing solid demand growth despite trade tensions between China and the United States.
A surge in iron ore prices lifted Fortescue’s profit to a record $3.19 billion, almost triple last year and a slight beat on consensus, and helped the company double its final dividend to A$0.24 per share from its payout last year.
“This was a strong set of results for FMG, in line with our estimates,” said broker RBC Capital in a report, which pegged consensus estimates at $3.03 billion. “The final dividend was stronger than we had expected,”
Fortescue joins rival Australian iron ore miners in reporting bumper profits after a mine disaster in Brazil early this year created a global shortfall and sent prices for the steel-making raw material soaring.
Rio Tinto delivered a record payout while BHP Group posted its biggest profit in more than five years but flagged headwinds due to global growth concerns.
“We have seen the announcements even over the last few days, and tariffs commentary. And it does cause volatility in markets,” said Fortescue Chief Executive Elizabeth Gaines.
“What underpins our confidence in the outlook is that we have seen China’s steel production up 9% in the first seven months of the year and we are still seeing strong demand for our products,” she told journalists on a results call.
China has been raising stimulus measures to offset a slowdown in economic growth hampered by trade tarrifs. The trade dispute intensified last week after both sides leveled more tariffs on each other’s exports.
“We are certainly seeing the investment in infrastructure continue to underpin that strength in demand,” Gaines said.
Still, China’s breakneck rise in steel production may slow in the second half due to seasonal measures to contain air pollution and ahead of China’s 70th anniversary celebrations, she added.
Benchmark iron ore prices SH-CCN-IRNOR62 have come off steeply in recent weeks, falling nearly 30 percent since the end of July as some Brazilian production has come back on line and as global demand worries have intensified.
Fortescue, meanwhile, has been ramping up production of its higher grade products as customers seek to use better quality ore to lower emissions.
The average price Fortescue received for its ore in the financial year jumped 48% from a year earlier to $65 per dry metric tonne.
Shares in Fortescue fell 3.6 percent to A$7.30 in a market hit by trade concerns on Monday. However, its shares have still nearly doubled so far this year.
The miner last month forecast stronger iron ore shipments in 2020, but also flagged higher costs due to rises in wages and and inputs like diesel as its moves further afield for its growth projects, Iron Bridge and Eliwana. ($1 = 1.4806 Australian dollars) (Reporting by Melanie Burton; additional reporting by Nikhil Kurian Nainan in Bengaluru; editing by Richard Pullin)