Ferrexpo pellet production reaches record high in January
12 February 2015
Ukrainian iron ore miner Ferrexpo produced 1.01 mmt of pellets in January, the Interfax-Ukraine news agency reported on Feb. 11. The company achieved a strong 23% m/m recovery in operations (+2.5% yoy) after reducing output due to power supply shortages in Ukraine in November and December.
Roman Topolyuk: The news is positive for Ferrexpo, as it might be able to fully load its 12.0 mmt pellet production capacity in 2015 (implying 8% yoy growth), compared to our previous projection of flat production at 11.3 mmt. The risk of further power supply cuts in 1Q15 seems to be mitigated so far. Maintaining such output intensity throughout the year translates into EBITDA of USD 283 mln in 2015, we estimate (vs. USD 259 mln at 11.3 mmt of pellets). Nevertheless, the company still has to get support from the majority of bondholders regarding its exchange offer to avoid liquidity gaps in 2016.
