Ferrexpo pays out $39m as its profits tumble

IRON ORE miner Ferrexpo brushed off a sharp drop in profits yesterday with a surprise special dividend.

Shareholders in the Ukrainian iron ore pellet producer will benefit from a 2012 6.6 cents a share special dividend – amounting to a total payout of $39m (£26m) – on top of the ordinary final dividend of 3.3 cents a share, thanks to progress made from the opening of its new Yeristovo mine in the eastern European country.

The payout came as Ferrexpo said pre-tax profits over the year slumped 62 per cent to $262,000, down from $691,000 in 2011, hurt by tumbling iron ore prices.

“Overall, pricing for the iron ore market remains difficult to predict while the economic outlook for Ukraine is uncertain,” Ferrexpo warned yesterday.

Iron ore prices, which hit three-year lows in September, fell 24 per cent to $128 a tonne in 2012. The miner sold 9.7m tonnes last year, in line with 2011.

Annual revenues sank 20 per cent to $1.4m, down from $1.8m in 2011.

FTSE 250-listed Ferrexpo, whose pellet production from its ore was up four per cent year-on-year to 9.4m tonnes, said it was pushing ahead with plans to ramp up production to 12m tonnes of pellets next year, helped by a contribution from its Yeristovo operation.

“In the last five years, since its IPO, Ferrexpo has made significant progress in achieving its strategic objectives,” non-executive chairman Michael Abrahams said yesterday, as he hailed the opening of Yeristovo.

Shares in the miner closed down 7.41 per cent at 203.5p, as the special dividend failed to appease shareholders.