At the risk of sounding hyperbolic, MBA instructors should teach Ferrexpo 's (FXPO) 2016 turnaround as a textbook example of effective crisis management. At the start of the year, the iron ore pellet specialist was facing potentially crushing debt payments, an eight-year low in its key commodity and a cash balance wrecked by the collapse of its bank. Preliminary results show how Ferrexpo not only survived, but even managed a surprise return to the dividend list.
Understandably, the primary focus was on outgoings. Capital expenditure of $48m (£39m) focused only on sustaining operations, while unit cash costs reduced by 13 per cent to a 10-year low of $27.70 per tonne - in part thanks to a weakened hryvnia, Ukraine's currency. At the same time, sales teams secured a larger volume of orders in time for the second-half recovery in both iron ore prices and the premium applied to higher-grade pellets. This, together with the sale of 373,000 tonnes of pellets held on stock at the end of 2015, allowed the group to more than double net cash flows to $332m, and repay $196m of debt.