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Ferrexpo profits up on higher prices

Ukraine-focused Swiss iron ore mining company Ferrexpo has had a solid first half, with revenues rising on the back of higher iron ore fines prices.
Ferrexpo profits up on higher prices Ferrexpo profits up on higher prices Ferrexpo profits up on higher prices Ferrexpo profits up on higher prices Ferrexpo profits up on higher prices

Iron ore prices certainly helped Ferrexpo in the first half of 2019

Ferrexpo (LSE: FXPO) said its revenue increased 28% year-on-year to US$787 million in the June quarter due to higher prices and an increase in sales. The company's underlying EBITDA was up 59% yoy to $372 million, and profit after tax was up 78% to $270 million.

The company's declared interim ordinary dividend was up 100% year-on-year to 6.6c.

Capital investment doubled to $114 million and its net debt reduced to $282 million.

"During the period we continued to benefit from strong pricing for our high-grade iron ore pellets, which helped deliver healthy cash flows," said Ferrexpo non-executive chairman Steve Lucas.

"This enabled us to allocate capital to further reduce debt, increase organic investment in our assets to drive medium term growth and declare a record interim dividend to shareholders."

Ferrexpo said the average realised FOB price increased 28% compared with the first half of last year, while the supply of pellets remained tight and there was a significant increase in the iron ore fines price.

There was a 5% yoy increase in pellet production, and the proportion of high-quality 65% iron ore pellet was 96% of total output. There was a 4% increase in sales volumes year on year.

C1 cash cost was $46 per tonne up $4.4 per tonne, reflecting modernisation of processing facilities and near-term organic growth opportunities to increase production by 1.5 million tonnes to 12Mt per year, Ferrexpo said.

There were no work-related fatalities in the first half, an improvement on the one fatality recorded for the same period last year.