AGM Statement

RNS Number : 6956Y

Ferrexpo PLC

19 May 2016

 

Ferrexpo plc

("Ferrexpo", the "Group" or the "Company")

2016 AGM Statement

The Company is releasing the following update as part of its Annual General Meeting which is being held today.

Trading update

The Group's operations continued to perform strongly in 1Q 2016.

Pellet production from, own ore, grew 6% to 2.9 million tonnes in 1Q 2016 compared to 1Q 2015 while production of premium 65% Fe pellets, from own ore, increased 20% compared to 1Q 2015. Overall, premium 65% Fe pellets represented 96% of total production volumes (1Q 2015: 85% of production volumes). Total production, including third party ore, was in line with 1Q 2015 at 2.9 million tonnes

The average C1 cash cost of pellet production continued to fall in 1Q 2016 due to increased production from own ore, lower oil prices and the Hryvnia devaluation against the US dollar. The cash cost of production increased marginally in April following a recovery in oil prices.

Year to date, sales volumes have been underpinned by strong demand for pellets. The Company is pleased to report that in May it has made shipments to new high-quality customers in Western Europe and South East Asia.  With increasing demand, spot pellet premiums are improving from the low levels of December 2015 although, so far, they remain below 2015 average levels.

As of 30 April 2016 the Group had repaid US$103 million of debt amortisation and interest costs since 1 January 2016.  The Group has an overdue VAT receivable of US$10 million which was due for repayment at the end of April.

Board succession

As part of the ongoing Board refreshment programme and in view of the provisions of the UK Corporate Governance Code, when an independent director has completed a nine year term he will no longer be viewed as independent and will therefore retire from the Board once a suitable successor has been found. Wolfram Kuoni and Ihor Mitiukov, who both joined the Board in June 2007, and Oliver Baring, who joined the Board in December 2007, are seeking re-election at today's AGM and will retire from the Board once appropriate successors have been found.

Mike Salamon, who joined the Board in March 2009, will not be standing for re-election at today's AGM. The Board would like to thank Mike for his outstanding contribution to Ferrexpo.

Sir Malcolm Field was appointed to the Board as an independent non-executive director on 10 March 2016. As previously reported, Sir Malcolm is chairing a sub-committee responsible for reviewing matters relating to Bank F&C.

As announced on 13 April 2016, the Board today proposes the election of Mr Stephen Lucas as an independent non-executive director. If elected, he is intended to succeed Michael Abrahams as Chairman later in the year.

Michael Abrahams, Non-Executive Chairman, said:

"Ferrexpo is one of the lowest cost pellet producers in the world enabling it to remain profitable and cash generative during the current commodities downturn. The Group's production and marketing operations continue to perform very well, producing record levels of pellets, notably a significant increase in the output of the Group's premium 65% Fe pellets, and increasing Ferrexpo's presence in key markets."

For further information contact:

Ferrexpo:
Ingrid McMahon	[phone]
Maitland:
James Isola	[phone]

Notes to Editors:

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and transport and sales operations throughout the world. It has been mining and processing high quality iron ore pellets for the global steel industry for over 35 years. Ferrexpo's resource base is one of the largest iron ore deposits in the world. The Group is currently the 3rd largest supplier of pellets to the global steel industry and the largest producer and exporter of pellets from the Former Soviet Union. In 2015, it produced 11.7 million tonnes of pellets, a 6% increase compared to 2014 and a record for the Company. Ferrexpo has a diversified customer base supplying steel mills in Austria, Germany, Japan, South Korea, China as well as other European and Asian countries.  Ferrexpo is listed on the main market of the London Stock Exchange under the ticker FXPO. For further information, please visit www.ferrexpo.com

 

END

 

 

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