21st Mar 2018 09:09
LONDON (Alliance News) - FTSE 250-listed iron ore producer Ferrexpo PLC said on Wednesday profit nearly doubled in 2017, on top of revenue growth despite lower sales volumes and pellet production.
Operating in Ukraine, Ferrexpo produced fewer pellets in 2017, down 7.0% to 10.4 million tonnes from 11.2 million tonnes due to maintenance activities, which pushed sales down 11% to 10.5 million tonnes from 11.7 million tonnes.
Ferrexpo however said the average price for its 62% iron ore fines was higher year-on-year at USD71.3 per tonne from USD58.3 per tonne, and in turn cash costs rose to by 17% to USD32.3 per tonne from USD27.7 per tonne.
As a result of higher prices, revenue grew by 22% to USD1.20 billion from USD986.0 million the year before, leading to a near doubling of pretax profit to USD449.8 million from USD231.4 million
As a result of the strong financial performance, Ferrexpo hiked its dividend to 16.5 cents per share from 6.6 cents.
Net debt was reduced by 32% to USD403.0 million at the end of 2017 from USD589.0 million at the end of 2016.
Ferrexpo said it expects higher pellet premiums in 2018, reflecting strong demand for pellets and customer agreements, and production volumes is anticipated to be in line in the first half and ahead in the second half compared to 2017.
"In 2018, Ferrexpo expects further rationalisation of steel capacity in China which should support global steel margins, and in turn encourage a continued focus on iron making productivity. These dynamics, together with a continued focus by Chinese authorities on the environment and a reduction of air emissions, should provide a favourable setting for iron ore pellets," said Chairman Steve Lucas.
Shares in Ferroexpo were down 0.7% at 299.60 pence on Wednesday.
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