Poltava Iron Ore Reports 2.4-times 2007 Net Income Increase

According to Poltava Iron Ore (PGOK: SELL) announcement, its 2007 net income surged 2.4-times yoy to USD 67.5 mln. Eugene Cherviachenko: Reported net income in 2007 is 14.4% above our forecast of USD 59 mln. Earlier this month, parent Ferrexpo (FXPO LN: HOLD) confirmed that it was in the process of setting up a JV with an international partner to operate and develop the Yeristovskoye and Belanovskoye iron ore deposits without the involvement of Poltava; hence the mill will be limited to its designed production capacity at no more than 12 mln mt of pellets p.a. We maintain our negative view on the stock and confirm our SELL rating on Poltava Iron Ore.