Ferrexpo Share Discussion Threads

[denc] 07/7/2021 14:47

Seems corporation tax in Switzerland is around 14% but there is also a company capital value tax. Like a corporate wealth tax. They must move to London soon.

[bozzy_s] 07/7/2021 12:42

Excellent update. I'll amend my H1 estimates later. My profit after tax of $841m was based on H1 sales of 5.28mt of pellets. Today's update says sales were 5.6mt.


My updated H1 guestimate:

Revenue $1,495 m

Cost of production $232 m

Gross profit $1,263 m

Selling & distribution costs / admin costs / other costs $200 m

Profit before tax $1,063 m

Income tax (say 15%, same as 2020) $159 m

Profit after tax $904 m or £650 m

EPS £1.10


Note - I've given zero credit for concentrate sales or the higher priced 67% pellets

[thags] 07/7/2021 11:38

Croasdalelfc where did you get those figures from?
The manipulation continues, Usually when it rises fast on open it falls just as hard. we are going to have to wait another month to see any positive price action on this one
Bozzy If there was a way to register this company away from switzerland and get rid of this dreaded WHT we could easily see this one fly

[croasdalelfc] 07/7/2021 10:30

$1.5B revenue H1 . Total for 2020 was $1.7B.Current EBITDA 60%.$900m EBITDA . PAT ~$500m?

[bozzy_s] 07/7/2021 00:45

When looking into Swiss Withholding Tax a few months ago, I noted it's also taken when shares are repurchased.

I'd guess / hope the 35% withheld tax is offset against FXPO's corporation tax bill.

It might be a bit trickier than normal to conduct a buyback program.


Here's a bit of food for thought. Did FXPO register in Switzerland in order to be in Europe, but outside the EU? If that were the primary reason, could they switch to London and save us all that SWT? Would their corporation tax bill be higher as a result?

[blueclyde] 06/7/2021 18:46

Probably why they will start buying back shares at some point.

[paulheptonstall] 06/7/2021 17:47

I do think the term Market Makers is better defined in future as Market Manipulators

When is all this madness going to end

Iron Ore Price Up, Healthy Dividends, Debt paid off

What is the rationale for the low share price It doesn't make sense to me at all, unless someone is loading up before the trading statement tomorrow and results in August

Or is it cos the national side lost 4-0 last weekend to the UK....lolol

[thags] 06/7/2021 16:06

denc all my dividends have had 35% taken off.
yesterday iron ore hit a year high today we are down a good amount, bizarre.
R9505571 I do hope we have some uplift on good results although I suspect it could go either way as the production figures will be down slightly due to the ongoing upgrades, who knows what will happen I give up trying to guess. August results are key to see any real price movement and gain lost momentum

[r9505571] 06/7/2021 15:41

A stronger pound tends to weigh on the top-flight index, as around 70% of its constituents derive most of their earnings from overseas. I'm hoping a positive update 2 Moro will give us a lift!

[bozzy_s] 06/7/2021 15:19

Not sure how that happened denc. Every FXPO dividend I've received had 35% SWT. How did you only get 15% deducted?

[denc] 06/7/2021 14:38

I am . Last year my FXPO dividends were reduced by 15% . Now they are reduced by 35%.

[bozzy_s] 02/7/2021 23:43

While leaving the EU has personally cost me (it's now uneconomical for a small non-VAT registered business to trade with EU), I don't think there has been any change in the double taxation treaty with Switzerland.

From PWC's website, an article last updated on 24th June 2021, makes no reference to any changes in the current situation.



So I'm fairly confident, but not certain, that nothing has changed. We still get credit for the SWT deducted at source.

The key line from above is "HMRC has an agreement with the Swiss tax authorities"

Rather than "The EU has an agreement with Swiss....."

Looking at the list of countries Switzerland co-operates with (from denc's link from PWC's site), most are outside the EU. I think there'll be no overall change. It'll just be a new UK-Swiss treaty instead of an EU-Swiss one.

I'll see if I can get a definitive answer sometime next week.

Edit - ditchsid's link shows the UK and Swiss signed a treaty in 2017, after the Brexit vote. So as I thought, nothing has changed. Same treaty. UK-Swiss instead of EU-Swiss.

Thanks as always for the intelligent, thought-provoking posts. Hopefully we'll get the answer we want soon.

[denc] 02/7/2021 13:22

Because the treaty was made with the EU not the UK. Int Brexit wonderful.

[denc] 02/7/2021 13:21

It seems that since Dec 31st 2020 we do not have a double tax agreement with Switzerland. See here https://taxsummaries.pwc.com/switzerland/corporate/withholding-taxes

[thags] 02/7/2021 13:21

The Swiss wht is a real issue for many. There are workarounds by holding in a normal share account and claiming back the wht or holding in an ISA and selling before ex div and buying back after. This only works if the dividend is big enough to cover the spread/fees/stamp duty and allows you a 35% margin of the dividend as a buffer to re buy. Unless leaving the EU means we can no longer claim back the wht through self assessment?

[ditchsid] 02/7/2021 12:54

What's the problem? We have a double taxation agreement with Switzerland. Claim relief for tax deducted through your tax return. Any effect on share price will have been factored in ages ago.

[denc] 02/7/2021 12:37

You may have wondered why your FXPO divi was not as big as you thought. Upon leaving the EU we lost our treaty rights and the Swiss witholding tax went back to 35% from 15%. This will be affecting the share price imhoUpon exit of the United Kingdom from the European Union on 31 January 2020, a transition period running until 31 December 2020 applied during which bilateral agreements between Switzerland and the European Union, including the AEOI between Switzerland and the European Union, continued to apply to the United Kingdom. After this transition period, the AEOI is no longer applicable to the United Kingdom as the treaty with the European Union no longer applies to the United Kingdom. It is worth noting that the treaty with the European Union also applied to Gibraltar as a European territory for whose external relations a member state is responsible. Being that this member state is the United Kingdom, with the exit of the United Kingdom from the European Union, the AEOI no longer applies to Gibraltar either.

[maxsvo] 02/7/2021 11:54

Net profit for the first half of 2021 according to preliminary estimates amounted to $ 722 million

[bozzy_s] 01/7/2021 21:55

Would you look at that! 65% pellet price is at an all time high today, thanks to a $7 increase in pellet premium.

$326.80 today vs $325.70 on 10th May.

The disconnect between FXPO's financial performance and its share price gets wider. Guess I'll be reinvesting my dividend again !!

[bozzy_s] 01/7/2021 12:23

Mostly agree Thags. The only place I differ is I'm not frustrated with the market undervaluing FXPO (though it's also about 70% of my portfolio, thanks to this year's performance). It's these mis-prices which create opportunities to make money. If everything were valued fairly there'd be little trading, and little profit to be made.

Assuming iron ore doesn't suddenly drop by 50%, FXPO is ridiculously underpriced. It's trading at less than 2x 2021 EPS - after tax!

And if production increases as planned, and the pellet price stays above $300/t, it's trading at probably 1.2x - 1.8x 2022 EPS after tax!

And yielding anywhere between 10% and 20%.

The market won't let that happen for long. We'll be at your target within the next 18 months if pellet prices stay high.

[thags] 01/7/2021 09:31

Kenmitch I'm not worried at all just frustrated with the general market direction given how well fxpo is performing. It is 70% of my portfolio which shows how much faith I have and I don't plan on selling it unless iron ore falls to $60. The volume is increasing, quality is increasing,premium is increasing, debt is gone. I was actually quite relieved they paid the debt off completely as it means a delayed dividend (I've had plenty this year already) and no futile interest payments. My long term target remains £10 although I don't think the market will ever accept this company for what it is....

[croasdalelfc] 01/7/2021 09:12

https://concorde.ua/rs/daily/item_77919/Prediction of ~85c dividend for 2021 up from 72.5c

[pigeonfeeder] 01/7/2021 08:47

Thanks for sharing your forecast bozzy.

Stockopedia (which is supposed to be based on the average of all broker forecasts) is only estimating EPS of $1.82 for 2021. I suspect your figures will prove to be more accurate.

An unbelievable bargain, despite the country risk. Problem is it is already my biggest holding and am reluctant to put more than 10% of my trading account into one share - not as brave as Bellbottom.