Metals and Mining
March 23, 2011
Ferrexpo: Putting the Party on Hold - Ferrexpo today released its FY10 results, which are in line with our expectations. The company’s sales doubled YoY to USD 1.3bn, while EBITDA increased by 4.2x to USD 585mn. The average price at which Ferrexpo sold its iron ore pellets was up 85% YoY at USD 133/tonne. We leave our projections for Ferrexpo unchanged, modeling sales growth of 4% CAGR in 2010-2015 with an average EBITDA margin of 48% over the period. We reiterate our target price of USD 7.37, which suggests a 12% upside. This limited upside leads us to downgrade our recommendation for the FXPO stock to HOLD.
