Metals and Mining
August 03, 2011
Ferrexpo has reported outstanding financial results for 1H11 on the back of higher-than-expected global iron ore prices over the period. Revenues surged by 63% YoY to USD 855mn, while net profit was up by 2.1x YoY to USD 294mn, implying a net margin of 34.4% (+8p.p. YoY). We revise our model to incorporate a higher selling price, as well as higher production costs, and obtain an updated target price of USD 7.75 per share, which suggests an upside potential of 10%. We therefore reiterate our HOLD rating on the FXPO stock.
