Ferrexpo, the FTSE 250-listed iron ore pellet producer, has unveiled a special dividend of 6.6 cents per share, amounting to approximately 39m dollars, after disclosing enhanced margins and production in the year ended December 31st.

The group reported that its growth projects progressed as planned and first ore was achieved at Ferrexpo Yeristovo Mining (FYM) in July 2012, with commercial production expected in 2013.

In accordance with its stated dividend policy, the group also recommended an unchanged final ordinary dividend of 3.3 cents per share.

Some 9.3m tonnes of pellets were produced at Ferrexpo Poltava Mining (FPM), up from 9.1m tonnes a year earlier, and 0.1m tonnes of pellets were produced at FYM.

Group revenue declined by 20% to $1.4bn due to lower market prices for iron ore. In 2012, the average benchmark price for 62% Fe iron ore fines to China CFR fell by 24% to $128 per tonne compared to an average of $168 per tonne in 2011.

EBITDA (earnings before interest, tax, depreciation and amortisation - a widely used measure of operating profit) for the period was $402m compared to $801m in 2011. Group profit after tax declined to $216m from$575m in 2011.

The group also recorded significant capital investment of $429m, up from $380m in the previous full year.

Michael Abrahams, Non-Executive Chairman of Ferrexpo, said: "In the face of general cost inflation prevalent in the mining industry, the group has maintained its position as a competitive cost producer of pellets and in 2012 it lowered its seaborne freight costs delivering more product via capesize vessels both enhancing margins and allowing Ferrexpo to provide a better service to first class steel mills around the world with its high quality iron ore product.

"The group has continued to develop its asset base through the modernisation of the existing mine and processing facilities, Ferrexpo Poltava Mining, and in 2012 by opening its second mine, Ferrexpo Yeristovo Mining, the first new iron ore mine in the CIS for many years."

MF

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