Fortescue Metals Group Ltd released its first half results today. The company faced a heavy decline of 94% in its first half net profit mainly due to a loan revaluation, foreign exchange losses and lower prices of ore.

The Perth based mining company posted a first half net profit of $43 million, decreasing by 94% while in the first half of the previous year the company posted net profit of $760 million.

The company said that this huge decrease in H1 net profit is largely attributable to a negative accounting charge on its loan note to Leucadia National Corp. Fortescue, Australia's third-biggest producer of iron ore, said in its results that the revaluation of the Leucadia loan note resulted in a negative adjustment of $55 million in the first half profit while it first half of last year it impacted positively by adding $1.4 billion in net profit.

In the first half the underlying net profit, excluding the impact of the loan note revaluation and currency, was posted $98 million while it was reported $164 million in the same period last year. The company reported revenue of $1.18 billion in the first half increased by 17% from $1.01 billion a year earlier. For the first half, EBITDA was reported $426 million while it was posted $479 million in the same period last year.

The lower average realized prices of iron ore also impacted the profit as the price was decreased to$57.22 per dry metric ton from $71.65 in H1 last year.