The board of Ferrexpo (FXPO) appeared to be in a chipper mood as it unveiled the group’s long delayed 2018 results this week. Despite a 34 per cent jump in cash costs and a dip in the average iron ore fines price from $71.30 (£54.85) to $69.50 per tonne, operating cash flow of $292m and a slight rise in production was enough to justify a doubling in the final dividend to 6.6¢ a share, in addition to a 6.6¢ special due this month.
And with Ferrexpo's iron ore pellets continuing to sell “at high levels”, and net debt down 14 per cent to $339m, non-executive chairman Steve Lucas may well boast of “a platform to deliver the next stage in our planned expansion”, and increase production by 13 per cent by 2021.
What’s more, the board has reached a unanimous view, “based on a lack of clear evidence to the contrary” and “unambiguous representations” over many years, that chief executive Kostyantin Zhevago does not exert significant influence or control over a Ukrainian charity to which Ferrexpo has donated $110m over the past six years, and which is now the subject of an independent review into potential misappropriation of funds. Unfortunately, the miner’s auditors at Deloitte have been unable to conclude the same.
On average, analysts expect adjusted earnings of 75.8¢ a share in 2019, falling to 62.8¢ in 2020.
| FERREXPO (FXPO) | ||||
| ORD PRICE: | 286p | MARKET VALUE: | £ 1.68bn | |
| TOUCH: | 285.3-286.3p | 12-MONTH HIGH: | 306p | LOW: 134p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 147¢ | NET DEBT: | 39% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢)* |
| 2014 | 1.39 | 254 | 30.5 | 12.2 |
| 2015 | 0.96 | 25.4 | 5.7 | 3.3 |
| 2016 | 0.99 | 231 | 32.0 | 6.6 |
| 2017 | 1.20 | 450 | 67.1 | 16.5 |
| 2018 | 1.27 | 392 | 56.9 | 23.1 |
| % change | +6 | -13 | -15 | +40 |
| Ex-div: | 2 May & 13 Jun | |||
| Payment: | 14 May & 1 Jul | |||
| £1=$1.30. *Includes special dividends | ||||
