2019 H1 Interesting analysis4 Aug 2020 13:40
Hi All,
I was just ready last years H1 results very interesting looking at the average H1 FE 65% Iroe ore price in 2019. Obviously it is a lot higher H12020. We were on £2.10p last year. Hopefully it will be a good day tomorrow for FXPO.
2019 H1
The Group has continued to perform well in 1H 2019. Compared with 1H 2018 pellet production was up 5%, sales volumes increased 4%, revenue increased by 28% while profit after tax increased by 78%. Strong cash flow generation funded capital investment of US$114 million and dividend payments of US$78 million whilst reducing net debt by US$57 million to US$282 million (31 December 2018: US$339 million).
1H 2019 was notable for the large increases in prices for all grades of iron ore. The Benchmark 62% Fe iron ore fines price increased by US$45 per tonne from 1 January 2019 to 30 June 2019. While the 65% Fe iron ore fines price increased by US$41 per tonne from US$88 per tonne as of 1 January 2019 to US$129 per tonne as of 30 June 2019.
During the period, the majority of seaborne iron ore pellet traded under long term contracts moved to a higher grade index as the basis for pricing. This move allowed Ferrexpo to directly capture the price premium currently contained in the 65% Fe price over the 62% Fe price, while pellet premiums were in line with 1H 2018. The average 65% Fe iron ore fines price was US$105 in 1H 2019 compared to an average 62% Fe fines price of US$70 per tonne in 1H 2018. In 2H 2019, Ferrexpo will continue to follow international benchmark pricing for its products. Currently steel demand is muted in some regions reflecting increased raw material costs and weaker end-user demand. The Group has the ability to deploy tonnage to other markets to offset any regional weakness.
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