Ferrexpo defers dividend due to Covid-19; FY profit rises

Ferrexpo posted a rise in full-year profit and revenue on Wednesday but said it was deferring its dividend in light of the coronavirus pandemic.

In the year to the end of December 2019, pre-tax profit rose 18% to $459.6m, on revenue of $1.5bn, also up 18% from the previous year, boosted by higher iron ore fines prices and an increase in sales volumes.

Underlying earnings before interest, tax, depreciation and amortisation pushed up 17% to $586m and net cash flows from operations were 62% higher at $473m.

Non-executive chairman Steve Lucas said: "During 1Q 2020, Covid-19 began causing disruption to Chinese supply chains impacting the distribution networks of steel producers and their customers. This could result in short-term volatility for the iron ore market as high levels of steel inventory, built up during this period, are released into the supply chain once normal operations resume. Early signs are indicating that the Chinese economy is beginning to recover from the peak of the Covid-19 virus."

He said that while the company had previously expected Europe to show a mild recovery in key markets from the second half of the year, the spread of the virus "could result in further economic uncertainty".

As a result, it has deferred its decision on a final ordinary and/or special dividend to "an appropriate time when the market situation and the effect of the Covid-19 virus has become clearer".