Metals and Mining
August 08, 2014
Ferrexpo improved its EBITDA in 1H14 by 32% YoY to USD 321mn as lower production cost more than offset a drop in achieved iron ore prices. Still, we believe that the company’s results in 2H14 and onward will be considerably less rosy in light of ongoing depressed prices for iron ore and higher operational costs due to industrial inflation. As a result, we model 2H14 EBITDA at just USD 171mn. We reiterate our SELL recommendation for the FXPO stock with target price of GBP 1.08 (vs. GBP 1.25 before).
