Central Iron Ore doubles net income in 2011

Central Iron Ore (CGOK UK) disclosed net income of USD 325.7 mln (+101% yoy) for 2011 in an announcement yesterday for its AGM on April 19. The agenda of AGM includes dividend distribution and approval of “significant deals”, which can give shareholders who vote it a put option (see our note dated March 1) to sell shares in Central Iron Ore to the company at the price one day before the AGM announcement – USD 1.01 (UAH 8.097).

Roman Topolyuk: Central Iron Ore’s strong growth in its bottom line in 2011 was driven by rising iron ore prices. The reported net income was 8.6% higher than our forecast. If the company’s AGM votes for full distribution of 2011 net income, the implied DPS is USD 0.28 per share and dividend yield is 28%.