OREANDA-NEWS. Ferrexpo plc, a top five supplier of iron ore pellets to the global steel industry, announces its financial results for the year ended 31 December 2014.

Michael Abrahams, Non-Executive Chairman, said:
"Ferrexpo has had a successful year against a backdrop of a dramatic fall in iron ore prices and significant political upheaval in Ukraine. The Group increased pellet production, including the output of its premium 65% Fe pellets, completed its modernisation and expansion programme reaching 12 million tonnes per year annualised capacity, agreed further long term contracts with premium international steel mills and moved all customers to a sustainable index linked pricing mechanism.

Pricing has proved to be challenging with the benchmark iron ore price falling by 47% to USD 72 per tonne from USD 135 per tonne at the start of 2014, on average 28% below 2013. EBITDA has, however, been maintained at levels in line with the prior year as a result of strong pellet premiums, increased production and lower costs.

Iron ore pricing is likely to remain subdued in 2015 and Ferrexpo, along with the general consensus of market observers, expects that the average CFR 62% Fe China benchmark price will be materially below 2014.

The significant investments the Group has made over the past five years, along with strong pellet premiums, reduced operating costs, as a result of the devaluation of the local currency, as well as lower freight and energy costs, should enable the Group to remain strongly competitive in the world pellet market.

The Company's operations in Ukraine are remote from the current conflict area. The current year has started well both in production and sales. In January 2015, Ferrexpo produced a record one million tonnes of pellets, while in February all of the Group's output was in the form of premium 65% Fe pellets, another record for the Group. Sales volumes continue to be at or above base contract levels. Ukraine, however, has a weak banking and financial system and the overall situation in the country, remains uncertain and subject to change.

The Board would like to express its sincere appreciation to all of the Group's employees, especially in Ukraine, for their contribution to this strong set of results and for their continued dedication during a challenging time in the country and in the iron ore industry.

Ferrexpo's performance in 2014 demonstrated the resilience and strength of its business and gives the Board confidence in its ability to deliver further profitability when external conditions improve."