Ferrexpo PLC (LON:FXPO), a FTSE 250 iron ore pellet producer, today announced its full year audited financial results for the 12 months ended 31 December 2019.
- Revenue up 18% to US$1.5 billion due to higher iron ore fines prices and an increase in sales volumes
- Underlying EBITDA A up 17% to US$586 million (2018: US$503 million)
- 62% increase in net cash flows from operations to US$473 million (2018: US$292 million)
- Net debt A to underlying EBITDA reduced to 0.48 times
- Capital investment A increased 83% to US$247 million (2018: US$:135 million)
Steve Lucas, Ferrexpo Non-Executive Chairman, said:
“Ferrexpo has continued to deliver strong cash flow generation which is up 62% year on year. This has enabled us to allocate capital to further reduce debt, to increase investment to drive medium term growth, and to pay record dividends to shareholders.”
“I am also pleased to report that the Group had no fatalities in 2019 (2018: one fatality) and that the Group’s Lost time injury frequency rate (“LTIFR”) declined to 0.58 times – a record low for the Group.
“The safety and wellbeing of our employees is paramount. That is why we are taking precautions to mitigate the risk of infection from the COVID-19 virus. This includes cancellation of business trips in accordance with respective government advice, also in locations where the COVID-19 virus has had a more severe impact, Ferrexpo has stipulated a working from home requirement. We have been following and will continue to follow the advice from health authorities in Ukraine, as well as other jurisdictions where our employees are based.
“During 1Q 2020, COVID-19 began causing disruption to Chinese supply chains impacting the distribution networks of steel producers and their customers. This could result in short-term volatility for the iron ore market as high levels of steel inventory, built up during this period, are released into the supply chain once normal operations resume. Early signs are indicating that the Chinese economy is beginning to recover from the peak of the COVID-19 virus.
“The spread of the virus into Europe, however, could result in further economic uncertainty. Prior to the virus, we had expected steel profitability in Europe to show a mild recovery in key markets from the second half of the year onwards.
“Amidst this backdrop, Ferrexpo remains well placed to manage our way through the current uncertainties due to our low cost position relative to our peers, our well invested asset base, our premium customer portfolio and our strong balance sheet.
“Nevertheless, given this general market uncertainty, the Board has deferred its decision on a final ordinary and/or special dividend to an appropriate time when the market situation and the effect of the COVID-19 virus has become clearer. At this point, the Board intends to declare a dividend and will keep the market updated.”