Ferrexpo sees increased H1 financial results as output and prices rise

Thursday, 05 August 2010 17:42:33 (GMT+2)

Switzerland-based iron ore miner Ferrexpo, whose main interests are in Ukrainian iron ore assets, has announced than in the first half of the current year it registered a 74 percent year-on-year increase in its revenue to $526 million, due to the record production levels and significant price increases.

Ferrexpo's H1 2010 EBITDA went up by 257 percent to $215 million, and its underlying profit before tax increased by 393 percent to $183 million, both compared to H1 2009.

During the period in question, the Ferrexpo's sales volumes increased 13 percent year on year to 4.738 million mt, as European steel mills continued to restock iron ore pellets following very low inventory levels in 2009 and to operate at higher levels, while Chinese iron ore requirements continued to underpin world demand. In addition, in Q2 2010, Ferrexpo registered significant price increases of 90 to 120 percent compared to the 2009-10 annual benchmark.

"We believe, however, there is currently a growing divergence of pricing horizons applied by producers who had negotiated quarterly price agreements in the first half of the year. We anticipate it will take some time for the transparency which existed under the annual pricing system to return as the market's pricing mechanism continues to evolve," reads the company's statement.

Ferrexpo said that it is confident that it can continue to produce at full capacity and place all of its output through its established market presence, thus underpinning its expectations for a strong financial performance for the rest of the year.

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