Ferrexpo achieves record iron pellet production in first half

7th Aug 2013 08:52

Iron pellet producer Ferrexpo saw sales volumes grow by 19 per cent to 5.3m tonnes in the first six months on the back of strong demand from all markets.The group achieved record pellet production of 5.3m tonnes, up 11% on the previous year, boosted by the ramp-up of production from the new Ferrexpo Yeristovo Mine (FYM) in the Ukraine. Three million tonnes of ore was mined at FYM in the first half, producing 859,000 tonnes of pellets.However, the group's achieved price was 6.0% lower than the first half of 2012 reflecting a 4.0% decrease in market pricing and the timing of fixed price settlements with traditional customers. Strong volumes and cost controls helped to mitigate price volatility which lead to earnings before interest, tax, depreciation and amortisation (EBITDA) of $244m, in line with the previous year.At the end of the period net gearing was 26% and net debt was $566m, up from $423m at the end of December. The company said it was on track to complete its $647m investment programme to increase the quantity and quality of its pellets. "Ferrexpo has performed well in the first half of the current year and expects to increase production in the second half as its new mine, Ferrexpo Yeristovo Mining (FYM) continues to ramp up," said Michael Abrahams, Non-Executive Chairman."Once the FYM mine reaches its initial planned capacity, anticipated in the second half of the year, further operating efficiencies should result. Ferrexpo's capital projects are also progressing well and, whilst the iron ore price is likely to remain volatile, the group is in a good position to continue its investment programme, as appropriate."Shares rose 3.49% to 169.10p at 09:23 on Wednesday.RD