FERREXPO plc
(“Ferrexpo” or the “Group”)
INTERIM RESULTS
Ferrexpo, the FTSE 250 iron ore pellet producer, today announces its interim results for the six months ended 30 June 2011.
Highlights
Financial
Record first half financial performance
· Revenue increased 63% to US$855 million (1H 2010: US$526 million)
· EBITDA[1] increased by 86% to US$401million (1H 2010:US$215 million)
· Diluted EPS increased 111% to 49.73 US cents (1H 2010: 23.57 US cents)
· Dividend of 3.3 US cents per share (1H 2010: 3.3 US cents per share)
Operational
Production at full capacity and an increase in product quality
- Production of 4.8 million tonnes of pellets (1H 2010: 4.9 million tonnes of pellets)
- 4% increase in production of 65% Fe pellets to 2.2 million tonnes
- Total capex US$120 million (2010: US$42 million)
- Growth projects progressing as planned
- Continued addition to logistics capabilities:
· Purchase of 112 rail cars
· Integration of Helogistics
· Loading of first capesize vessel
Management
Management team strengthened
- Brian Maynard appointed as COO
- Jason Keys appointed as CMO
Funding
Strong balance sheet
- Net funds position of US$25 million at 30 June 2011 (1H 2010: net debt US$257 million)
- US$500 million Eurobond raised at 7.875% coupon
- Well positioned to further develop growth projects
Outlook
Continuing strong market environment for iron ore
- Limited supply response in medium term
- FPM to continue to produce at full capacity
· Projects on track and fully funded
· The Board is reviewing total cost to double pellet output to 20 million tonnes per annum.
Michael Abrahams, Non-Executive Chairman, commented:
“Ferrexpo is pleased to report a very strong financial performance for the six month period ended 30 June 2011. This was underpinned by an excellent operational performance, with production of iron ore pellets once again at full capacity and costs effectively managed in an inflationary environment. This was further supported by continued growth in demand for iron ore, in particular pellets, during the period with global iron ore prices remaining at high levels.
“Demand for iron ore is expected to remain strong in the medium term while supply is proving slow to respond. Iron ore is a cyclical market and Ferrexpo will retain its operational and financial flexibility through its low cost base, well established marketing strategy, incremental approach to developing its assets and strong balance sheet. The Group will continue to invest in its growth projects and manage its costs where possible to ensure a strong financial performance in the second half of the year and through the commodity cycle.”
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