Fortescue Metals Group, an Australia-based iron ore firm, said that its net profit declined 4% during the six-month period that ended December 31, 2015. The iron ore exporter attributed the decline mainly to the collapse in iron ore prices. However, this slump was offset by the cost trimming strategy accomplished by the company during the period.

Fortescue posted profit after tax of US$319 million for the first-half period, down 4% from US$331 million in the same period last year. On a per share basis, earnings for the period declined to 10.24 cents from 10.62 cents in the period ended December 31, 2014.

The company's pre-tax profit amounted to US$428 million, down from US$440 million in the previous year period. Profit, excluding income tax and other total finance costs, decreased to US$568 million from US$746 million in the corresponding period in 2014.

Gross profit for the reporting period dropped to US$702 million from US$750 million in 2014. Operating sales revenue totalled US$3.34 billion, down from US$4.86 billion in the same period last year. Revenue from the iron ore sector decelerated to US$3.25 billion from US$4.73 billion in the prior year period.

Jeremy Sussman, an expert at Clarksons Platou Securities, said Bloomberg that the company's effort to reduce cost has not been valued by investors. The cost cutting strategy marks a significant move undertaken by the company to improve its business. Shares of the company dropped 2.9% to A$2.04 in the Sydney stock exchange.

The iron ore exporter said that it repaid a debt amount of US$1.1 billion during the first half period, cutting its total debt to US$6.1 billion. Fortescue's C1 cost amounted to US$16 per wet metric ton, a decrease of 47% from US$30 per wet metric ton in the same period in 2014. The company's board has declared a dividend of A$0.03 for the interim period, which is payable on April 7, 2016.

Major iron ore producers like Glencore Plc and BHP have lowered their dividend in order to reduce their costs amid the poor iron ore prices. Bloomberg quoted a data from Metal Bulletin Ltd, which said that the Iron ore with 62% content increased 0.2% to $51.60 per ton on Tuesday, the highest level from October 23.

The company depends heavily on iron ore production for its revenue and its balance sheet is impacted by the fluctuation in the iron ore prices. The iron ore industry is facing a serious hard time as a result of the surplus supply from producers amid weak demand from consumers like China. However, spot iron ore increased over 17% in 2016 to nearly $50 per tonne, giving some relief to the miners in the industry, as reported by Reuters.

Fortescue is trying hard to maintain its position as the third largest iron ore exporter in the world amid the wavering prices in the commodity market. The company remains hopeful to boost its balance sheet in the future.