Ferrexpo PLC (LSE:FXPO), the world's third-largest exporter of high-grade iron ore pellets, said its board approved a formal shareholder returns policy for dividends and special dividends.
The FTSE-250 company will target a dividend payout equivalent to 30% of free cash flow for the financial year and will also continue to evaluate additional shareholder returns, in the form of special dividends, at times of strong financial and operational performance.
The new policy continues the approach applied by the board since the group's listing in 2007, it said, adding that adopting a formal policy demonstrates the group's strong commitment to shareholder returns throughout the commodity cycle.
Ferrexpo said its board believes that free cash flow is the most appropriate financial metric to use in its shareholder returns policy as it does not detract from its focus on investing in its operations in Ukraine and its wider logistics network.
"Ferrexpo is a company that has consistently delivered both growth, in the form of production volumes and product quality, and shareholder returns throughout the commodity cycle, as established through our track record since listing,” said interim chief executive Jim North.
“Today's announcement marks an important milestone in the group's development and provides further clarity and disclosure on our capital allocation strategy.”