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Ferrexpo numbers overshadowed by Covid-19 and Zhevago

Ukraine iron ore miner delays announcing final dividend for 2019 in light of European demand falling
March 18, 2020

Ferrexpo (FXPO) has delayed its final dividend declaration for 2019 amidst a European slowdown brought on by Covid-19. The iron ore pellet producer had already had a bumpy ride before the pandemic, with 50.3 per cent shareholder and chief executive-on-ice Kostyantin Zhevago still a target for Ukrainian authorities over allegations related to his former bank.

The latest development is a court freezing his holding in Ferrexpo, which the company is appealing in the courts next month.

Aside from the pitfalls of having a single dominant shareholder, the miner had a strong year. The iron ore price climbed in the first half and boosted 2019 revenue by 18 per cent to $1.5bn (£1.25bn) on flat production and sales volumes. Much of this filtered down to the bottom line, with underlying cash profits climbing 17 per cent to $586m and cash flow from operating activities up almost two-thirds to $473m. 

Ferrexpo’s other regulatory issue – the linked Blooming Land charity and its use of donated money – saw a quiet end, with the company’s review committee “unable to conclude as to the ultimate use of all of Ferrexpo's funds by the charity”. 

Consensus forecasts see adjusted 2020 EPS coming down 42 per cent to 40ȼ.  

FERREXPO (FXPO)    
ORD PRICE:121pMARKET VALUE:£721m
TOUCH:112-127p12-MONTH HIGH:306pLOW: 95p
DIVIDEND YIELD:9.0%PE RATIO:2
NET ASSET VALUE:230ȼNET DEBT:21%*
Year to 31 DecTurnover ($bn)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (ȼ)
20150.9625.45.73.3
20160.9923132.06.6
20171.2045067.116.5
20181.2739256.923.1
20191.5146068.613.2
% change+19+17+21-43
Ex-div:na   
Payment:na   
£1=$1.21 *Includes lease liabilities of $10m NB: 2019 final or special dividend delayed over Covid-19