Iron ore pellet producer Ferrexpo reported a 13% improvement in revenue in 2020 on Wednesday, to $1.7bn, which it put down to increasing production volumes and its destocking process in the first half of the year.
The FTSE 250 company said underlying EBITDA was up 46% year-on-year for the 12 months ended 31 December at $859m, while net cash flows from operations were 45% higher at $687m.
Its net cash position at year end stood at $4m, swinging from a net debt position of $281m at the end of 2019.
Dividends paid in 2020 were 26% higher than in the prior year, at $195m.
The Ferrexpo board said that, as a result of the “strong” operational and financial performance in 2020, as well as the company’s transition to a net cash position and ongoing “healthy” iron ore prices, it was proposing a further special interim dividend of 39.6 US cents per share.
Total dividends paid for 2020 would amount to 72.6 cents as a result, up from distributions of 19.8 cents per share in the prior year.
“Although Covid-19 caused disruption to global iron ore demand patterns, our central geographic location between Europe and Asia, coupled with flexibility our logistics capacity, enabled us to efficiently pivot towards China in 2020, as it quickly emerged from the pandemic with a strong growth focus on metals,” said non-executive chair Lucio Genovese.
“The resultant rise in iron ore prices, coupled with the group’s increase in production and cost control, has driven the strong financial performance for the group in 2020.
“Through consistent investment and capital management, the group has once again been able to deliver strong financial performance, coupled with shareholder returns.”
Genovese said the board would consider whether to propose a final dividend for 2020, which, if proposed, would be put to the group’s annual general meeting.
“Despite the continued effects of the pandemic, Ferrexpo will continue to invest in both our assets and our people, produce high quality iron ore products for the global steel industry, and operate a business model that provides sustainability, growth and returns to shareholders.”
At 0811 GMT, shares in Ferrexpo were up 2.49% at 364.05p.