- Ferrexpo reported a decline in annual profits as pellet sales were constrained by reduced shipments towards the end of the year.

For 2018, pre-tax profit fell 12.9% to $392m and revenue grew 6.4% to $1.27bn.

Production of pellets increased 2% to 10.6m tonnes, reflecting planned pellet line refurbishment in the second quarter 2018 and a general increase in maintenance levels, the company said.

Sales volumes for the year were 10.2m tonnes compared to 10.5m tonnes in 2017 as volumes were impacted by reduced barge shipments towards the end of the year given the low water levels on the Danube River in second half 2018.

'Slower than expected rail shipments in December and a delay of an ocean-going shipment into 1H 2019 also lowered sales volumes and increased year end working capital,' the company added.

In 2019, Ferrexpo said it would continue its repairs and maintenance programme which will include a 75 day pellet line shutdown in second half of 2019.

'Overall, 2019 production volumes are expected to be in line with 2018 at approximately 10.6 million tonnes,' the company said.

'The cost of production in 2019 is expected to increase as a result of higher commodity input prices and local inflation in Ukraine. Year to date the Hryvnia has been broadly stable against the US dollar, appreciating by approximately 2%. '

'Capital expenditure in 2019 will be focused towards growth projects and is expected to be in the range of US$220 million to US$300 million, subject to realised pricing and market conditions. '

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