2016 Full Year Results

2016 FULL YEAR RESULTS

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Who we are

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine. It is the 6th largest seaborne pellet producer and has been mining, processing and selling high quality iron ore pellets to the global steel industry for over 35 years. Ferrexpo’s resource base is one of the largest iron ore deposits in the world.

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Share Price

Glossary

A

Act

The Companies Act 2006

AGM

The Annual General Meeting of the Company

Articles

Articles of Association of the Company

Audit Committee

The Audit Committee of the Company's Board

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B

Belanovo or Belanovskoye

An iron ore deposit located immediately to the north of Yeristovo

Benchmark Price

International seaborne traded iron ore pricing mechanism understood to be offered to the market by major iron ore producers under long-term contracts

Beneficiation Process

A number of processes whereby the mineral is extracted from the crude ore

BIP

Business Improvement Programme, a programme of projects to increase production output and efficiency at FPM

Board

The Board of Directors of the Company

bt

Billion Tonnes

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C

C1 Costs

Represent the cash costs of production of iron pellets from own ore divided by production volume of own ore, and excludes non-cash costs such as depreciation, pension costs and inventory movements, costs of purchased ore, concentrate and production cost of gravel

Capesize

Capesize vessels are typically above 150,000 tonnes deadweight. Ships in this class include oil tankers, supertankers and bulk carriers transporting coal, ore, and other commodity raw materials. Standard cape size vessels are able to transit through Suez Canal

Capital Employed

The aggregate of equity attributable to shareholders, non-controlling interests and borrowings

CFR

Delivery including cost and freight

CIF

Delivery including cost, insurance and freight

CIS

The Commonwealth of Independent States

Code

The UK Corporate Governance Code published in 2012

CODM

The Executive Committee is considered to be the Group’s Chief Operating Decision Maker

Company

Ferrexpo plc, a public company incorporated in England and Wales with limited liability

CPI

Consumer Price Index

CRU

The CRU Group provides market analysis and consulting advice in the global mining industry (see www.crugroup.com)

CSR

Corporate Social Responsibility

CSR Committee

The Corporate Safety and Social Responsibility Committee of the Board of the Company

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D

DAP

Delivery at place

DFS

Detailed feasibility study

Directors

The Directors of the Company

Dragline Excavators

Heavy excavators used to excavate material. A dragline consists of a large bucket which is suspended from a boom

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E

EBITDA

The Group calculates EBITDA as profit from continuing operations before tax and finance plus depreciation and amortisation and non-recurring exceptional items included in other income and other expenses, share-based payment expenses and the net of gains and losses from disposal of investments and property, plant and equipment

EBT

Employee Benefit Trust

EPS

Earnings per share

Executive Committee

The Executive Committee of management appointed by the Company’s Board

Executive Directors

The Executive Directors of the Company

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F

FBM

Ferrexpo Belanovo Mining, also known as BGOK, a company incorporated under the laws of Ukraine

Fe

Iron

Ferrexpo

Ferrexpo and its subsidiaries 

Ferrexpo AG Group

Ferrexpo AG and its subsidiaries including FPM

Fevamotinico S.a.r.l.

A company incorporated with limited liability in Luxembourg

First-DDSG

First-DDSG Logistics Holding GmbH (formerly Helogistics Holding GmbH) and its subsidiaries, and inland waterway transport group operating on the Danube/ Rhine corridor 

FOB

Delivered free on board, which means that the seller’s obligation to deliver has been fulfilled when the goods have passed over the ship’s rail at the named port of shipment, and all future obligations in terms of costs and risks of loss or damage transfer to the buyer from that point onwards

FPM

Ferrexpo Poltava Mining, also known as Ferrexpo Poltava GOK Corporation or PGOK, a company 
incorporated under the laws of Ukraine

FRMC

Financial Risk Management Committee, a sub-committee of the Executive Committee

FTSE 250

Financial Times Stock Exchange top 250 companies

FYM

Ferrexpo Yeristovo Mining, also known as YGOK, a company incorporated under the laws of Ukraine

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G

Group

The Company and its subsidiaries 

Growth Markets

These are predominantly in Asia and have the potential to deliver new and significant sales volumes to the Group

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H

HSE

Health, safety and environment 

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I

IAS

International Accounting Standards

IASB

International Accounting Standards Board

IFRS

International Financial Reporting Standards, as adopted by the EU

IPO

Initial public offering

Iron ore concentrate

Product of the beneficiation process with enriched iron content 

Iron ore pellets

Balled and fired agglomerate of iron ore concentrate, whose physical properties are well suited for transportation to and reduction within a blast furnace

Iron ore sinter fines

Fine iron ore screened to -6.3mm

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J

JORC

Australasian Joint Ore Reserves Committee – the internationally accepted code for ore classification

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K

K22

GPL ore has been classified as either K22 or K23 quality, of which K22 ore is of higher quality (richer)

KPI

Key Performance Indicator

kt

Thousand tonnes

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L

LIBOR

The London Inter Bank Offered Rate

LLC

Limited Liability Company

LTIFR

Lost-Time Injury Frequency Rates

LTIP

Long-Term Incentive Plan

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M

m3

Cubic metre

Majority Shareholder

Fevamotinico S.a.r.l., The Minco Trust and Kostyantin Zhevago (together)

mm

Millimetre

mt

Million tonnes

mtpa

Million tonnes per annum

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N

Natural Markets

These include Turkey, the Middle East and Western Europe and are those markets where Ferrexpo has a competitive advantage over more distant producers, but where market share remains relatively low

Nominations Committee

The Nominations Committee of the Comapny's Board

Non-Executive Directors

Non-executive Directors of the Company

NOPAT

Net operating profit after tax

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O

OHSAS 18001

International Safety Standard ‘Occupational Health & Safety Management System Specification’

Ordinary Shares

Ordinary Shares of 10 pence each in the company

Ore

A mineral or mineral aggregate containing precious or useful minerals in such quantities, grade and chemical combination as to make extraction economic

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P

Panamax

Modern Panamax ships typically carry a weight of between 65,000 to 90,000 tonnes of cargo and can transit both Panama and Suez canals

PPI

Ukrainian producer price index

Probable Reserves

Those measured and/or indicated mineral resources which are not yet ‘proved’, but of which detailed technical and economic studies have demonstrated that extraction can be justified at the time of determination and under specific economic conditions

Proved Reserves

Measured mineral resources of which detailed technical and economic studies have demonstrated that extraction can be justified at the time of determination and under specific economic conditions

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R

Rail Car

Railway wagon used for the transport of iron ore concentrate or pellets

Relationship Agreement

The relationship agreement entered into among Fevamotinico S.a.r.l., Kostyantin Zhevago, The Minco Trust and the Company

Remuneration Committee

The Remuneration Committee of the Company's Board

Reserves

Those parts of mineral resources for which sufficient information is available to enable detailed or conceptual mine planning and for which such planning has been undertaken. Reserves are classified as either proved or probable

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S

Sinter

A porous aggregate charged directly to the blast furnace which is normally produced by firing fine iron ore and/or iron ore concentrate, other binding materials, and coke breeze as the heat source

Spot Price

The current price of a product for immediate delivery

Sterling/£

Pound Sterling, the currency of the United Kingdom

STIP

Short-Term Incentive Plan

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T

Tailings

The waste material produced from ore after economically recoverable metals or minerals have been extracted. Changes in metal prices and improvements in technology can sometimes make the tailings economic to process at a later date

Tolling

The process by which a customer supplies concentrate to a smelter and the smelter invoices the customer the smelting charge, and possibly a refining charge, and then returns the metal to the customer

Ton

A US short ton, equal to 0.9072 metric tonnes

tonne or t

Metric tonne

Traditional Markets

These lie within Central and Eastern Europe and include steel plants that were designed to use Ferrexpo pellts. Ferrexpo has been supplying some of these customers for more than 20 years. Ferrexpo has well-established logistics routes and infrastructure to these markets by both river barge and rail. These markets include Austria, Czech Republic, Hungary and Slovakia.

Treasury Shares

A company’s own issued shares that it has purchased but not cancelled

TSF

Tailings storage facility

TSR

Total shareholder return. The total return earned on a share over a period of time, measured as the dividend per share plus capital gain, divided by initial share price

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U

UAH

Ukrainian Hryvnia, the currency of Ukraine

Ukr SEPRO

The quality certification system in Ukraine, regulated by law to ensure conformity with safety and environmental standards

Underlying Earnings

An alternative measure of the underlying financial performance of the Group's operations. Underlying earnings is presented as profit attributal to equity shareholders before adjusted items. Adjusted items are those items of financial performance that the Group believes should be separately disclosed on the face of the income statement to assist in the understanding of the underlying financial performance achieved by the Group. Adjusted items that relate to the operating performance of the Group include impairment charges and reversals and other exceptional items. Non-operating adjusting items include profits and losses of investments and businesses as well as IPO costs and non-operating foreign exchange gains and losses

US$/t

US Dollars per tonne

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V

Value-in-use

The implied value of a material to an end user relative to other options, eg evaluating, in financial terms, the productivity in the steel making process of a particular quality of iron ore pellets versus the productivity of alternative qualities of iron ore pellets

VAT

Value Added Tax

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W

WAFV

Weighted average fair value

WMS

Wet magnetic separation

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Y

Yeristovo or Yeristovskoye

The deposit being developed by FYM

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