Ferrexpo posts 500 percent rise in after-tax profit in 2010

On March 23, Swiss-headquartered iron ore miner Ferrexpo, whose main interests are in Ukrainian iron ore assets, announced a 500 percent year-on-year increase in its 2010 profit after tax to $425 million, due to higher sales and significant price increases, which saw its revenues almost double to $1.3 billion in 2010. In 2010, Ferrexpo's EBITDA increased to $585 million, compared to $138 million in 2009.
 
Accordingly, in 2010, Ferrexpo's sales volumes increased by 7.8 percent year on year to 9.7 million mt of pellets. Over 90 percent of the sales volume from the company's own ore was based on long-term supply agreements, compared to 70 percent in 2009, as the company witnessed a recovery in demand from the customer base in its traditional markets. Overall, Ferrexpo achieved an 88.4 percent year-on-year increase in its average DAF/FOB price in 2010. 
 
"As industry fundamentals recovered in 2010, Ferrexpo was well placed to benefit from higher prices as it continued to produce at full capacity. The group's increased cash generation and profitability allowed it to recommence its capital investment program to further develop growth opportunities," Ferrexpo's chairman Michael Abrahams said.
 
In November 2010, Ferrexpo approved $647 million of capital expenditure as part of the first stage of a three-stage investment program to increase significantly the quantity and quality of its production.
 
Ferrexpo said that the 2011 financial year has started well with continued strong demand for its product, and that it continues to operate at full capacity.