The booming price of iron ore has driven a surge in profits at Ferrexpo, but the London-listed miner disappointed investors yesterday by falling short of expectations and issuing a cautious outlook.
The Ukrainian producer of iron ore pellets said that its pre-tax profits had almost trebled to $797 million, from $294 million in the same period of 2020.
Revenues increased by 74 per cent to $1.35 billion as iron ore prices roughly doubled on a year earlier, helping to offset a 9 per cent decline in sales volumes while customers used up stockpiles.
However, underlying earnings were about 3 per cent below consensus forecasts as prices and sales volumes were slightly lower than had been expected. The dividend, of 39.6 cents per share, was a fifth lower than predicted.
Ferrexpo issued a cautious outlook for the second half, saying that iron ore demand and prices were likely to fall and markets could remain volatile.
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Ferrexpo produces iron ore pellets from two mines in Ukraine. It is majority-owned by Kostyantin Zhevago, 47, a Ukrainian billionaire who was its chief executive until 2019, when he stood aside to deal with allegations of embezzlement from Finance & Credit Bank, a Ukrainian lender that he used to control. The bank went insolvent in 2015 while holding $174 million of Ferrexpo funds.
Last month Ukraine’s state bureau of investigation said that Zhevago, who remains a non-executive director at Ferrexpo, had been placed on an international wanted list again. A spokesman for Zhevago denied this in a statement to the Interfax news agency, saying that Interpol was considering the case but had not taken a decision. Zhevago denies any wrongdoing.
Shares in Ferrexpo fell 46¼p, or 9.3 per cent, to 449p yesterday.
