Ferrexpo Share Discussion Threads

[its the oxman] 10/12/2020 10:02

Just sit back and look forward to our next update and dividend.

[podgyted] 09/12/2020 22:08

Analysts finally admitting they've called iron ore wrong - they've been predicting a cliff-edge price drop for over a year now.

Just looked at Custeel tonight - in the 2 weeks from 25/11 to 9/12 65% iron ore fines have gone from $140 to $162. That's an incredible 15% rise in 2 weeks.

I don't have a crystal ball but with China sucking in everything that moves and the the R-o-W playing catch as well I don't see any event in the short-term that will move prices down significantly. In the medium term I see fiscal economic stimulus in infrastructure following CV19 which will keep upward pressure on demand and an economic war between China and Australia which will move China's reliance on Australian iron ore elsewhere.

Just IMHO plus as ever DYOR.

[yawn1971] 09/12/2020 11:48

Loving this chart ....

[its the oxman] 09/12/2020 11:20

Why not 300p for Xmas. It would be nice.

[bozzy_s] 09/12/2020 01:04

Ok, I've crunched some numbers for 2021. Will post full details later.

Headline figures, using FXPO's target of 12 million tonnes of pellets for 2021:

Revenue $1.8bn - $2.4bn assuming all production is 65% pellets, priced $150 - $200 per tonne. At today's price $192.20, revenue would be $2.3bn.

Operating profit $639m - $852m using average operating margin since 2016. This is probably overly cautious as higher selling prices = higher profit margin.

EPS 78p - 104p.

Even if the 65% pellet price dropped from $192 today, to average just $150 in 2021, we're still probably trading on a P/E of ~3.33.

FXPO has been around for 40 years, and has 40 years of reserves if production increases in 2021 as planned. It's priced as if it's going to disappear in 2024!


Edit. Notes from my spreadsheet:

Assumed negligable financing costs for 2021...

FY 2017 $54,766,000
FY 2018 $39,332,000
FY 2019 $23,191,000
H1 2020 $7,504,000


Net debt

Dec-17 $403,332,000
Dec-18 $338,862,000
Dec-19 $281,358,000
Jun-20 $174,262,000


Operating profit margin

FY 2016 31.79%
FY 2017 40.92%
FY 2018 33.56%
FY 2019 33.00%
H1 2020 38.33%

Average 35.52%


Operating profit at different average pellet prices, and EPS

$192.20 .... $818,772,000 / £615,618,000 / 100p
$200 .... $852,000,000 / £640,602,000 / 104p
$180 .... $766,800,000 / £576,541,000 / 94p
$170 .... $724,200,000 / £544,511,000 / 89p
$160 .... $681,600,000 / £512,481,000 / 83p
$150 .... $639,000,000 / £480,451,000 / 78p

[thags] 08/12/2020 23:34

Is that 192.2 🤭

[denziiil1] 08/12/2020 23:00

try looking at 65% fines with pellet premium! http://www.custeel.com/en/csi.jsp

[thags] 08/12/2020 22:08

100p was ridiculous and some trolls were saying its going to drop to 30p.
This video the guy analyses fxpo. Why don't more people realise it's true value
hxxps://youtu.be/wvoEg0NCeaA

[r9505571] 08/12/2020 21:43

https://www.mining.com/another-day-another-iron-ore-price-high/

[bozzy_s] 08/12/2020 17:49

Almost kept the winning streak going!

While FXPO has gained about 30% this month, I don't think it's actually kept up with the pellet price change. The overall effect, if the pellet prices stay this high, should be an enormous increase in 2021's profitability and cash flow.

I'm going to do some research and calculations tonight, to see what FXPO expects to produce next year, and how much profit they'll make at various pellet prices.

I'm quite excited to be honest. I expect it'll show 260p is as ridiculous a valuation as 100p was back in March.

[bellbottom] 08/12/2020 14:39

I am pleasantly surprised at how well the share price is holding up after the climb over the last three weeks. I was certainly expecting a pull back before rising up again on expectations of excellent production report at beginning of January and the possibility of yet another dividend payment.

Fits and starts, but hopefully this is now the real deal. We've waited long enough for the climb up to the true value.

BB

[thags] 08/12/2020 11:47

Pullback today but iron ore continues to soar higher, just waiting on a dividend announcement or trading update in January now

[bellbottom] 08/12/2020 11:27

Excellent all round article on the corrupt banking system up until 2014/2016 in Ukraine. Worth reading all the way through. Mention of course of the ex CEO and his Bank of Finance and Credit.

Still shocks me today, just reading through the blatant theft of billions by corrupt individuals, who of course continue to deny any wrongdoing.

"According to the Deposit Guarantee Fund, up to 99% of loans from some banks were made to related companies. “Bank owners took money from the public and gave it to their companies, which used it for their own ends,” said Olga Bilai, the deputy managing director of the Deposit Guarantee Fund. “There were times when those companies put that money into their business and times when they simply took it across the border,” she added."



BB

[bellbottom] 07/12/2020 17:05

The whole thing with Ferrexpo corporate governance is inevitably entwined with the bigger picture in Ukraine. It is heartening to know that the huge majority of Ukrainians see the wiping out of corruption as possibly the number one issue in Ukraine. Now if we could only get the same thing to happen in the UK, the money laundering capital of the world with the added bonus of British Overseas territory tax havens.



BB

[bellbottom] 07/12/2020 08:17

Concerning the ex CEO and his ongoing issues. This time relating to the ownership of his football club and ongoing investigations into loans and sponsorship funding.



BB

[bellbottom] 06/12/2020 10:23

Chartist view. Came out yesterday. Know nothing about Serpent Trading but always interesting to get another angle. Wouldn't disagree with the overdue re-rating and share price getting up and over 300p.




BB

[zho] 05/12/2020 07:55

Iron ore prices went ballistic on Friday as unprecedented demand from China, constrained supply from Brazil and strained relations between Canberra and Beijing convulse the seaborne market.

[podgyted] 04/12/2020 17:49

Custeel saying 65% fines spot is $156.6 on the 4th Dec - up from $149.8 on the 3rd.

Wish it was a more transparent market but the trend is very positive.

[bellbottom] 04/12/2020 16:57

Bozzy got there before me. I originally got my figures from 'The Ukrainian Metal'

The figures in the presentation are from 2019. I think you'll find that 2020 figures, when officially published, will be much higher. Hopefully at least the 67% I have quoted.

Hopefully the trading summary in January will confirm more accurately.

Excellent end to the week.

BB

[bellbottom] 04/12/2020 16:49

Foxy22,

Ferrexpo have increased their exports to China and Asia by more than double this year - 2019 was around 30% of their exports to the Asian market. This year, so far we are looking at around 67% of their export market to China. A big increase which compensates for the decline in their more traditional European market.

Have a look at the presentation on their website from yesterday. There are some figures in there. But certainly they have got a strong market in China and this should only get stronger in the future.

BB

[bozzy_s] 04/12/2020 16:38

Foxy from yesterday's presentation:




FXPO's customers are:

36% Central / Eastern Europe
30% China / South East Asia
16% North East Asia
13% Western Europe
5% Turkey / Middle East / North Africa / India

[thags] 04/12/2020 16:37

They have been exporting to China recently but I'm assuming its temporary as they don't pay as much or its not as lucrative as the European market as transport costs are cheaper, someone can correct me if I'm miles off

[its the oxman] 04/12/2020 16:34

I think fundamentals can easily justify 300p, could go higher if iron ore remains firm. Difficult to say with any certainty but hopefully no return to 200p.