OREANDA-NEWS. July 02, 2010. Compared to 1Q2009, the Company's revenues grew by 34% to USD 189mn, while costs increased by 40% to USD 100mn, and the gross margin decreased by 3% to 47%. The Сompany increased EBITDA by 30% to USD 46mn, reaching the EBITDA margin of 55%. The net income fell by 46% to USD 11.6mn. Gross borrowings for the period decreased by 0.5% to USD 309.1mn.  The Company’s net financial debt increased by 42% to USD 286mn due to a USD 84mn decrease in cash on hand.

Millennium Capital: the news is positive for the stock. A growing global demand for iron ore raises the prices for high quality product of the Company, and long-term export contracts entered into by Ferrexpo in 2010 prove that fact. An improved EBITDA ratio and the growing revenues overshadow VAT return difficulties and increases in cost of sales and expenses. EBIDTA calculation effectively discards estimated USD 15mn provision for VAT receivables write-down. Considering the impact of this provision on the net income, we can conclude that it is temporarily underestimated. The only negative effect of the gross margin decrease is accounted for by the new recent USD 12mn expense for ore purchases and concentrate used for pellet production and a slight increase in all expendables costs. Right after public disclosure of the Company’s 1Q2010 financial results, one of the two supporting banks announced the start of a global Ferrexpo road show.