Ferrexpo's interim profits hit by rising costs and production dip

Iron ore pellet producer Ferrexpo raised sales 4.4% over the six months to 30 June to $617m as record price premiums offset a 1.2% dip in pellet production.

However, profits after extraordinary items fell 29.6% to $152m for the Ukraine-based group as cash costs rose due to higher commodity prices, local inflation and a stronger Hryvnia.

The interim dividend was held steady at 3.3p per share as operational cash inflow was around three times investing outflows, but net financing outflows saw cash drop to $82.3m from $97.7m in December. Net debt fell to $369m from $394m at the end of last year.

Ferrexpo's management reiterated guidance for a 1.5 metric tonne increase in output by 2020 to 12.0mt versus 2017’s production of 10.4mt as the company carries out a large maintenance programme at its pelletising facilities.