12th Mar 2014 08:03
LONDON (Alliance News) - Ferrexpo PLC Wednesday said Wednesday its pretax profit increased in its full year 2013 due to strong revenues and said that there are currently no disruptions to its operations in Ukraine despite the ongoing political upheaval in the country.
The iron ore producer, which operates solely in Ukraine, said its pretax profit increased 15% to USD305.4 million from USD265.7 million in the previous year as revenues increased 11% to USD1.58 billion from USD1.42 billion in 2012.
The company said its revenues increased as production ramped up and it achieved a 4% higher realised price for its iron ore during the period.
Ferrexpo added that despite 12% increased cost of sales at USD773.2 million from USD690.7 million the previous year, the company progressively reduced its cost of production quarter on quarter following the ramp up of mining operations at its Ferrexpo Yeristovo Mining.
As a result, Ferrexpo maintained its final dividend of 3.3 cents, bringing its full-year dividend to 6.6 cents, and announced a special dividend of 6.6 cents reflecting progress the company made in 2013.
The company said that there is currently no disruptions to its operations in Ukraine, following the change of leadership in the country and ongoing crisis in the Crimea region. Its mines are near the Dnieper River in the south of the country, but not in the Crimea peninsula itself.
It noted that a 16% devaluation of the Ukrainian hryvnia will reduce its operating costs but that this also is likely to lower the carrying value of its assets and liabilities.
In January, the company said production in its full year grew strongly despite a slight drop quarter-on-quarter in the fourth quarter due to a reduction in pellets from third-party materials and from its Poltava mine.
The iron ore producer said at the time that its total pellet production increased 12% to 10.8 million tonnes of iron for the full year ended December 31 from 9.7 million tonnes the previous year.
The majority of the company's yearly increase came from the ramp up of operations at its Yeristovo mine where its full year of iron ore production reached 2.1 million tonnes from 107,800 the previous year.
The company also said in January that it has reached the highest yearly production rates of 65% iron pellets, which increased 20% to 5.0 million tonnes from 4.2 million tonnes the previous year.
Ferrexpo said on Wednesday that despite weak iron ore prices in the first quarter of 2014, it expects prices to stabilise and to benefit from growing demand for higher quality feedstock in 2014 as greater environmental requirements for steel mills to reduce harmful emissions and the need to compensate for generally lower grades across the industry increases the need for premium iron ore.
At the open Wednesday, Ferrexpo shares are up 4.1% at 144.86 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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