Ferrexpo (FXPO) H2 2011 earnings summary

Executive summary

• Record own-ore pellet production, historic-high sales volumes and pricing, and 35.2% growth in profit for the year; major expansion projects remained on budget and schedule.

• Investment focused on modernising existing operations, developing new deposits and expanding logistics to support higher output and a broader customer base.

Financial highlights

• Revenue rose 38.1% to US$1,788.0m; average realised pellet price increased 28.4%, and sales volume reached 9.9mt versus 9.7mt in 2010.

• EBITDA increased 36.8% to US$800.9m; profit for the period rose 35.2% to US$574.9m; diluted EPS was 97.0 US cents versus 72.2 cents.

• Operating cash flow was US$502.7m; capital investment reached US$378.3m versus US$167.4m in 2010; net debt declined to US$80.2m.

Outlook and guidance

• Approved projects target a one-third increase in output to 12mtpa by end-2013; first ore from FYM was expected at end-2012, with projects reported on schedule and budget.

• A further expansion to 20mtpa by 2016 was planned, subject to approval of a new concentrator and subsequent pelletiser; final approval of the concentrator was anticipated in 2012.

• 2012 market prices had moderated and were not expected to match 2008 or 2011 highs, but were expected to remain above historic averages; short-term global economic volatility remained a concern.