In its first earnings announcement since the dramatic loss of its auditor in April, Ferrexpo (FXPO) has posted a sizeable cash profit increase thanks to buoyant iron ore prices.
The Ukrainian miner saw underlying adjusted cash profits climb more than half to $372m (£307m), as the margin rose nine percentage points to 47 per cent, despite higher cash costs. Production was up 5 per cent on the first six months of 2018, to 5.4m tonnes.
Ferrexpo said a price drop for iron ore pellets was forecast for the rest of the year, although it did not sell into the Chinese spot market at all in the first half. The average realised price per tonne for 65 per cent Fe iron ore pellets was still high, at $105. The company forecasts lower prices later in 2019, however, and S&P Global said Chinese steelmakers had been barely at break-even at times in the first half.
Ferrexpo chairman Steve Lucas said board members were still investigating the Blooming Land dealings that saw two directors step down earlier than planned and former auditor Deloitte quit.
Bloomberg consensus forecasts a 39 per cent rise in full-year adjusted cash profits to $696m.
| FERREXPO (FXPO) | ||||
| ORD PRICE: | 248p | MARKET VALUE: | £1.46bn | |
| TOUCH: | 248-249p | 12-MONTH HIGH: | 299p | LOW: 131p |
| DIVIDEND YIELD: | 8.8% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 185p | NET DEBT: | 26% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2018 | 617 | 179 | 25.9 | 3.3 |
| 2019 | 787 | 318 | 45.9 | 6.6 |
| % change | +28 | +78 | +77 | +100 |
| Ex-div: | 15 Aug | |||
| Payment: | 3 Sep | |||
| £1=$1.21 | ||||
