Iron ore pellet specialist Ferrexpo (LON:FXPO) unveiled a surprise special dividend for 2012, despite profits tumbling as iron prices gyrated wildly.
The Ukrainian group will make a 6.6c special payment, costing US$39mln, in addition to an unchanged final dividend of 3.3c.
Sales of pellets were little changed over the year at 9.7mln tonnes, but the average price fell to US$128 from US$168.
Revenues fell by 20% to US$1.42bn, while pre-tax profits were 62% lower at US$262mln against US$691mln.
Total pellet production eased slightly to 9.7 mln tonnes.
Ferrexpo has been spending heavily on developing a second mine, Ferrexpo Yeristovo Mining (FYM), which has started production but will kick in fully over the coming year and boost production to 12mln tonnes of pellets by 2014.
“Once mining operations at FYM have ramped up, Ferrexpo will have two mines in full operation providing associated cost benefits through higher output,” the company said.
Cash costs in 2012 rose to US$59.6 per tonne (2011: US$50.7 per tonne), but increasing use of capsize vessels enabled it to offset some of this local inflation through lowering seaborne freight costs.
Net debt at the end of the year rose to US$423mln from US$80mln. Ferrexpo is also owed US$302mln, (US$172mln) in VAT recoveries by the Ukrainian authorities.