Ferrexpo declares DPS of USc 6.6

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN, FXPOLN) will pay a special interim dividend of USc 6.6 per share on Jan.
15, the company reported in a Dec. 6 regulatory filing. The record date for the
payment will be Dec. 14, and the total amount paid to shareholders will be
approximately USD 40 mln, Ferrexpo said.

Ferrexpo’s dividend policy is to pay USc 6.6 per share
of sustainable yearly dividends and, if appropriate, USc 6.6 per share of
special dividends per year.

Dmytro Khoroshun: This is a
welcome development because Ferrexpo is currently rich in cash for which it
seems to have no good uses for. The company is very conservative with its
capital investments, although some acceleration occurred recently,
and even considers it appropriate to invest tens of millions per year in storing lean ore
to be used years later. Amid such cash usages, increasing payouts to
shareholders makes sense.

We retain our neutral view on FXPOLN Eurobonds.