Member Info for xparkie

I understand looking at prices relatively is almost always misguided, but a quick summary of the state of the business one of the last times it was around this price might prove interesting. I have undoubtedly botched some of these numbers but it’s just for a bit of fun anyway.

H1 2019
Peak Price: 296.40p
Production: 5.35Mt
Avg. Ore Price: 62% ~$152 & 65% ~$165 (including pp)
Revenue: $787m
Net Cash: -$282m

H1 2022 (Projected)
Current Price: 266.20p [down ~11%]
Production: Around 6.2Mt [up ~16%]
Current Ore Price: 65% ~$215 (including pp) [up ~30%]
Revenue: ~$1.33B [up ~70%]
Net Cash: +$117m

Of course, iron ore prices can go any which way and Putin can continue to ruffle feathers across the world but anyone who believes they can predict what will happen with either of these factors with any certainty is severely misguided.
One thing we can know however, is our business. And Ferrexpo is continually improving its production levels, its product quality and the health of its balance sheet – all while paying us a now guaranteed 30% minimum of FCF annually. Prices can be voted down in the short term but there will come a point where the sheer volume of cash and dividends Ferrexpo is throwing off will become too silly to ignore for any investor and the share price will be weighed back up to where it belongs. Down at these prices we’ll be seeing massive yields and I, for one, am happy to get paid to watch the share price slowly rise over the coming months and years back to a more reasonable level while regularly adding to my position throughout.
I hope you guys will join me and engage in lots of discussion about THE BUSINESS of Ferrexpo.

I remember up at around 400p when everyone was saying how wonderful the company was and now the share price has tanked everyone is all doom and gloom when the company has continually improved since then! Even the ore spot prices are looking very healthy now. Best of luck all.

People seem to forget that the average price of 65% fines was $122 in FY2020 and even after the recent drop it's sitting at $189 - a 55% increase. This alongside the 1MT increase in production and the transfer to 65% and 67% products instead of 62% and 65% just guarantees that Ferrexpo will compare favourably to last years revenues and earnings. Is it going to continue to be like H1 of 2021? Absolutely not. Is it going to be outstanding in it's own right? Undoubtedly. We should count ourselves lucky that for some reason the market hasn't actually read any financial reports for the company and buy up while it's sitting at a TTM P/E of 2.9! I know where this months paycheck is going...

Production was down marginally and as the report says this was due to pelletiser upgrades. I believe 3 of the 4 pellitisers were upgraded in H1? They obviously need to stop the machinery for short periods to upgrade it so managing to only marginally miss on production volume is absolutely incredible, I can't imagine what H2 production will be with all 4 up and running at the increased rate.

Sales volumes were down as they were offloading stockpiles last year so that's clearly not an issue.

Iron ore prices were sky high throughout H1 and have dropped lately, but Ferrexpo is more than just the iron ore price - as long as ore prices can stay at a moderate level for the forseeable future Ferrexpo is gonna be churning out cash. They now have no debt, a wonderful mangement team focussed heavily on the future and some of the lowest production costs in the industry.

The market is crazy and it very rarely makes sense but we can sit back and relax, raking in dividends and watching our shares slowly go up in value over the years - this company has a wonderful future ahead of it. Some of the information on this forum is really valuable but it seems when the price goes up people are searching for a reason why, and when it drops people are clutching at straws to decipher the cause. Instead, we need to be focussed on how fantastic the fundamentals of our business are and how massive the share price will be 3, 5 or 10 years in the future - because it will be!

We all know H1 earnings are going to be outstanding, so we should all count ourselves lucky that we're getting the brief opportunity to add to our positions at relatively low prices before the inevitable ramp up in August. This is really exciting as FXPO is being dragged down by bearish overall market trends and poor sentiment amongst miners but we know that in a couple weeks this is all going to change for Ferrexpo. A real blessing from the market of late for us who understand what's going on with our company!