Ferrexpo sees strong demand in 2011
FTSE 250 mining firm Ferrexpo achieved record sales volumes and prices in 2011, helped by producing at full capacity and an increased pellet quality.
Revenue reached $1,788m during the 12 months ended December 31st, up 38% on the $1,295m generated the year before, as a result of higher sales prices.
Meanwhile, pre-tax profit increased by 39% from $498m to $691m, while earnings per share rose 34% from 72.2 cents to 97 cents.
The company produces iron ore pellets, which are used in the production of steel. Global steel production increased by 6.8% in 2011 to a record 1.5bn tonnes, while China's crude steel output rose 8.9% to 695.5m tonnes.
Ferrexpo produced, from own ore, 9.1m tonnes of pellets during 2011, only slightly higher than the 9m tonnes produced the year before. However the output of 65% Fe increased by 5% to 4.3m tonnes. Sales volumes rose from 9.7m to 9.9m tonnes.
"It is Ferrexpo's strategy to develop its significant resource base, one of the largest iron deposits in the world, and to improve the quality of its product mix. Ferrexpo is well placed to capitalise on the progress made in 2011, said Non-Executive Chairman Michael Abrahams.
Operating cash flow after interest and tax and before acquisitions increased from $380m to $503m. Ferrexpo was able to cut its net debt from $104m to $80m.
The final dividend proposed was flat on last year at 3.3 cents per share.
"The board believes that although there is likely to be increased volatility in the world economy in the short term, the group is well placed to continue to deliver sustainable value creation," Abrahams said.
Shares rose 2.61% to 341.9p in early trading.