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Ferrexpo boosts production, sales volumes fall on logistical issues

The sales volumes are likely to catch up in the first half of 2019
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Premiums for higher quality iron ore were higher in 2018

Ferrexpo PLC (LON:FXPO) boosted pellet production by 7.2% during the fourth quarter of 2018, helping lift overall pellet production for the year by 1.6% to 10.6mln tonnes.

Total 2019 pellet production is expected to be in line with 2018 at 10.6mln tonnes, as maintenance work continues. 

READ: Ferrexpo boosts production by 6% after line refurbishment

Overall sales for 2018 will be approximately 10.2 mln tonnes after sales volumes were curtailed by reduced barge shipments as a result of the low water levels on the Danube River in the second half of 2018.

Slower than expected rail shipments in December 2018 and the timing of a Capesize shipment falling into January 2019 also impacted sales volumes. Ferrexpo expects these sales volumes to be caught up in the first half of this year. 

The average received price was approximately 9% higher in 2018 compared to 2017, reflecting stronger premiums for higher quality iron ore, including higher average pellet premiums.

The full year average 2018 cash cost of production is expected to be approximately US$44 per tonne compared to US$33 per tonne in 2017, due to higher energy prices and increased mining costs.

Net debt as of 31 December 2018 was approximately US$340mln, down significantly on the US$403mln figure from 2017.

Cash at 31 December 2018 stood at approximately US$60mln, while undrawn available debt facilities amounted to US$205mln. 

 

 

 

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