Ferrexpo’s access to seaborne markets is its "key catalyst and risk” according to analysts at Liberum.
The broker modelled second-half production of 6Mt for the iron ore pellet exporter, although this is dependent on access to seaborne markets.
Liberum said it is “optimistic” that an agreement similar to the grain corridor at the Black Sea can be reached for other exports, like iron ore.
Alternatively, a successful summer counter-offensive from Ukraine against Russia’s navy could expunge the Kremlin from the port.
“In addition, we understand that Ferrexpo has access to non-Ukrainian alternative ports on the Black Sea and that the company is building inventory at these.”
FTSE 250 Ferrexpo reported underlying earnings (EBITDA) of US$765mln compared to the consensus of US$730mln and Liberum estimates of US$719mln in 2022.
Capital expenditure was US$161mln and Liberum expects this to remain at a low run-rate until exports lift.
Ferrexpo’s US$106mln net cash position leaves Liberum with a “comfortable buffer” against further disruption.