www.ferrexpo.com
Ferrexpo plc is a Swiss headquartered resource company with assets in Ukraine. We are principally involved in the production and export of iron ore pellets, which are used in the manufacture of steel. Our asset base comprises one of the largest iron ore resources in the world.
We produce around ten million tonnes of iron ore pellets per year and with several growth projects in place are aiming to double future production. We are committed to becoming a leading global supplier of iron ore pellets, providing outstanding service to our customers and strong returns to our shareholders.
We became the first Ukrainian company to be listed on the main market of the London Stock Exchange (ticker: FXPO) following a successful Initial Public Offering on 15 June 2007. We are a member of the FTSE 250 UK Index.
Ferrexpo plc is the only pure-play iron ore company currently listed on the London Stock Exchange.
Ferrexpo’s shares see strong rise after it reveals increased production figures
Shares in Ukrainian iron ore producer Ferrexpo (LON:FXPO) stormed ahead today after the firm reported an increase in both total pellet production as well as production of higher-grade pellets during its third quarter.
By midday, the firm’s shares had increased by 10.8 per cent to hit 296 pence each.
Ferrexpo also revealed that August saw the second-highest month of pellet production (900,000 tonnes) in the company’s history.
Total pellets produced during Q3 2011 amounted to 2,333,600 tonnes, which was a 2.8 per cent increase on Q2’s total of 2,270,500 tonnes and 1.5 per cent greater than Q3 2010.
At 1,075,300 tonnes, production of the higher-grade 65-per cent iron pellets was greater by 2.1 per cent over Q3 2010 and 12.3 per cent greater than during the previous quarter.
Commenting on the production figures today, Evolution Securities said that Ferrexpo “is firmly on track” to meet its full year production targets having produced 7.3 million tonnes of pellets during the first nine months of 2011. The broker said that it estimates full year production will come in at 9.7 million tonnes.
Evolution noted that, like many mining stocks, Ferrexpo’s shares have undergone a big correction and that the market may be concerned that iron ore prices will fall as well as having worries about the firm’s core east and central European markets. “What we believe is being overlooked is that while iron ore prices remain strong, this company continues to make a lot of cash,” said the broker. “Ferrexpo is a low cost producer with a strong balance sheet and therefore we believe it is very resilient.”
Ferrexpo’s resource base is one of the largest iron ore deposits in the world. Its current producing asset, the Ferrexpo Poltava Mine, produced approximately 10 million tonnes of iron ore pellets in 2010, which made it the largest exporter of pellets in the Commonwealth of Independent States region.
The firm has a diversified list of customers. It supplies steel mills in Austria, Serbia, Slovakia, Czech Republic, Germany and other European states, as well as China, India, Japan among other Asian countries.
Evolution noted that Ferrexpo has “done an excellent job” in developing a new customer base outside Europe, having increased sales outside these areas by 20 per cent since 2008. “We strongly believe that Ferrexpo offers significant long-term value and see the recent market movements as presenting a buying opportunity,” it added.
Evolution has a ‘buy’ rating for Ferrexpo and a 504 pence target price.
