Ferrexpo revenue falls 41.9% yoy in 1H09

Ferrexpo (FXPO LN) recorded revenue of USD 301.8 mln in 1H09, down 41.9% yoy, the company in its 1H09 interim results announcement this morning. Ferrexpo said its EBITDA came to USD 60.3 mln (down 73.6% yoy) and net profit to USD 28.7 mln (down 81.8% yoy). At the end of the reporting period, the company said it had USD 74.3 mln in cash on its balance sheet and net debt of USD 222.3 mln. In terms of production, Ferrexpo said that it sold 100% of output (4.2 mt in 1H09, vs. 4.5 mt in 1H08). CEO Konstantin Zhevago said that the company was able to maintain sales by increasing sales to China and India while maintaining sales to traditional European markets. Ferrexpo said that it decreased its C1 costs by 15.4% yoy to USD 34.5/mt (vs. USD 40.9/mt in 1H08). Andriy Gerus: We are positive on the company’s operations, as the management was able to strengthen its presence in emerging markets (China, India) amid lower demand, while maintaining its level of production and sales (in mt) almost at last year’s level. The decline in sales in USD terms and profitability was due to the reduction in market prices for pellets. We expect that in 2H09 the company can improve its financials thanks to recovering demand and prices.