Australia's Fortescue posts 40 percent fall in H1 net profit

SYDNEY Feb 20 (Reuters) - Australia's Fortescue Metals Group, the world's No.4 iron ore producer, reported a 40 percent fall in first-half profit as the price of the steel-making ingredient fell sharply and costs rose as it ramped up production to feed Chinese steel mills.

Fortescue, which ranks behind Rio Tinto , Vale and BHP Billiton , posted a net profit of $478 million for the six months ended December.

That compared with $801 million a year ago and an average forecast from analysts of around $466 million, although their projections had ranged widely.

Fortescue Chief Executive Nev Power said a record operational result of a 32 percent rise in shipments to 35.7 tonnes for the half-year had partly offset price volatility.

Shares in the company were down 1.8 percent at A$5.09 at 0140 GMT.