Ferrexpo, the FTSE 250 iron ore pellet producer, today announces its full year results for the year ended 31 December 2013.
Michael Abrahams, Non-Executive Chairman, said:
"We would like to express our profound sadness for the loss of life as a result of the recent political turmoil in Ukraine, and extend our deepest sympathies to the families, communities and colleagues who have been affected.
We are hopeful of a satisfactory political outcome reflecting democratic principles.
At the time of writing, there have been no disruptions to Ferrexpo's operations in Ukraine.
In 2013, Ferrexpo was the fastest growing supplier by volume of pellets to the global steel industry and a top five seaborne producer. Total pellet production increased by 12% to 10.8 million tonnes, compared to an average industry decline during the year of over 5%. The Group also increased the quality of its pellet output, with a 20% increase of higher grade 65% Fe pellets. Ferrexpo achieved an average increase in its realised price of 4% and progressively reduced its cost of production quarter on quarter following the ramp up of mining operations at Ferrexpo Yeristovo Mining (FYM), and thus stabilised production costs year on year. Group production costs progressively reduced quarter on quarter. Overall, EBITDA increased by 25% to US$506 million (2012: US$405 million).
In 2014, the Group is well positioned to reduce costs through increased production volumes, as well as a more appropriately valued local currency. Since the balance sheet date, the Ukrainian Hryvnia has devalued by 16%. This will reduce those operating costs of the Group which are denominated in local currency, although, it will lower the carrying value of assets and liabilities which are also denominated in local currency.
Ferrexpo expects to benefit from growing demand for higher quality iron ore feedstock in 2014. The trend for premium iron ore is expected to be driven by greater environmental requirements for steel mills to reduce their harmful emissions as well as a necessity to compensate for the growth in lower grade iron ore fines that is becoming increasingly prevalent.
The Company is pleased to announce a final ordinary dividend of US3.3 cents per share and a special dividend of US6.6 cents per share reflecting the progress it has made in 2013."
