Ferrexpo reports record sales

Ferrexpo reported record sales volumes of approximately 11.7 metric tonnes (MT) compared to 11.3 MT in 2015, which reflected strong global demand for its pellets.

Total 2016 pellet production was 11.2 MT compared to 11.7 MT in 2015.

The company said lower pellet production in 2016 reflected an increase of 1 MT of higher performance FPP+1 pellets (2016 3.3 MT vs. 2.3 MT in 2015).

It also reflected the refurbishment of the travelling grate in the pelletiser and a decrease in production from low margin third party concentrate.

The group's average pellet price in 2016 increased slightly compared to 2015, reflecting a recovery in the 62% Fe iron ore fines price during the year (average 2016 $58.5 per tonne) compared to 2015 (average $55.5 per tonne) and a steadily improving pellet premium following lows reached in 1Q 2016.

The full year average 2016 cash cost of production was approximately $29 per tonne compared to $31.9 per tonne in 2015.

Ferrexpo's cash balance as of 31 December 2016 was circa $145m up $110M compared to $35M as of 31 December 2015. $196M of debt was retired during 2016.

In 2016, Ferrexpo successfully focused on reducing its debt levels, and enters 2017 with an improved capital structure.

In 2017 the group said it expects to benefit from higher pellet premiums while production volumes will continue to reflect better-quality output with total production increasing modestly compared to 2016.

The company stated that costs remained subject to commodity prices, the Hryvnia exchange rate and inflation levels in Ukraine.

At 11:42am: (LON:FXPO) Ferrexpo PLC share price was +9.25p at 138.75p