Companies@UA: База компаний Украины

Kyiv, August 5 (Interfax) - Ferrexpo plc, whose main asset is Ukrainian iron ore pellet producer Poltava Mining, saw its net profit plummet 81.8% year-on-year in the first half of 2009 to $28.708 million, from $157.658 million in the same period of last year, due to a drop in prices for iron ore pellets, the company said in an earnings report.

Ferrexpo said revenue fell 42% to $301.759 million, and EBITDA shrank almost three-quarters from $228.023 million to $60.295 million.

The company said pellet prices fell hardest in the second quarter due to a drop in demand from permanent clients under contracts and a higher proportion of spot sales. Also, production volumes fell heavily in January-February.

Ferrexpo also said it would wait until October to decide whether to pay dividends for H1 2009, and that its moratorium on large-scale capex was still in place.

As for operating performance, Ferrexpo has been running at full capacity for the last four months and has been selling all of its output. Sales in H1 2009 were 4.2 million tonnes, only marginally lower than the 4.5 million tonnes sold in the same period of last year. Ferrexpo managed to offset weaker demand in Europe by boosting sales to Asia: these accounted for 57% of total sales in the half.

Ferrexpo said there were now signs that the market is normalizing and that local and regional demand for iron ore is picking up. This has already lifted spot prices and suggests that the pricing environment will be positive in the second half of 2009.

Poltava Mining produces all of the Swiss-headquartered, London-listed Ferrexpo's iron ore. It exports most of its iron ore commodities to Austria, Poland, Romania, the Czech Republic, Slovakia, the former Yugoslavia, Bulgaria and Italy.

Ferrexpo has said Poltava Mining cut commercial pellet production tentatively 9.9% year-on-year to 4.139 million tonnes in the first half of 2009. Iron ore concentrate production fell 8.3% to 4.991 million tonnes.

Crude iron ore production in the half fell 4.7% year-on-year to 13.69 million tonnes. Poltava Mining produced 2.135 million tonnes of pellets with Fe-content of 62% (down 20.2% year-on-year) and 2.003 million tonnes of pellets with Fe 65% (down 27.7%).

Ukrainian businessman Konstiantyn Zhevaho owns 51% of Ferrexpo and RPG Industries SE (RPGI), the majority owner of coal producer New World Resources N.V. (NWR), owns 25%.