REG - Ferrexpo plc - Interim Results for six months ended 30 June 2025
Wed 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250806:nRSF1251Ua&default-theme=true
RNS Number : 1251U Ferrexpo PLC 06 August 2025
6 August 2025
Ferrexpo plc
("Ferrexpo", the "Group" or the "Company")
Interim Results for the six months ended 30 June 2025
Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore products
to the global steel industry, is pleased to report interim results for the six
months ended 30 June 2025 ("the period" or "first half" or "first six months"
or "1H 2025").
Commenting on the results, Lucio Genovese, Interim Executive Chair, said:
"The first six months of 2025 have been a tale of two halves. We started the
year on a strong footing, with the best quarterly production since the
full-scale invasion of Ukraine in February 2022. This momentum, was, however,
significantly curtailed in the second quarter as we were forced to downscale
our activities due to the decision by the Ukrainian tax authorities' to
suspend the refund of VAT to our Ukrainian subsidiaries. This is reflected in
a 40% drop in production in the second quarter compared to the first quarter.
We moved quickly to lower our costs. It is regrettable that at present we have
had to place approximately 40% of our workforce on reduced working hours or
furlough. We have also implemented programmes to optimise stripping rates,
repairs and maintenance, and cut non-essential spending across the business.
The effects of these measures are difficult to absorb, yet they have been
necessary and lessened the severe and negative impact of the suspension of VAT
refunds. We have been able to lower our costs as much as possible in order to
be competitive in a weak iron ore price environment.
During the first half, we were able to respond to strong demand from Chinese
customers for our high-grade low-alumina iron ore concentrate. As a result,
during the first six months of 2025, concentrate represented 36% of our
production mix, three times more than in the same period a year ago. Once
again, we have shown that the flexibility we have built into our business has
enabled us to be more responsive to short-term changes in iron ore markets and
take advantage of opportunities that present themselves. I anticipate that we
will be able to continue benefiting, as we shift away from being a pellet only
producer to a producer of different high-grade iron ore products, including a
variety of concentrate and pellet feed as well as pellets.
Since the full-scale invasion of Ukraine in February 2022, Ferrexpo has
continued to operate and export its products despite the immense challenges
posed by the war. By remaining operational we have been able to remain
relevant - maintaining a workforce, continuing to supply our customers, and
supporting our local communities and Ukraine as a whole. Our calculations
indicate that since February 2022 to the end of the reporting period, we have
paid more than US$180 million in salaries and US$340 million in taxes, while
investing more than US$400 million in capital expenditure, and procuring more
than US$1.9 billion in goods and services from within Ukraine.
However, these contributions are at risk. Since the start of 2025, the
Ukrainian tax authorities have suspended VAT refunds to our Ukrainian
subsidiaries, resulting in lower liquidity and forcing us to downscale
production to one pellet line. The tax authority's decision has also forced us
to make deep cost cuts, including placing more than a third of our workforce
on furlough or reduced working hours, resulting in knock on effects for
families and the local community.
If we had been able to continue producing at the same levels as in the first
quarter throughout the remainder of 2025, we calculate that we would have paid
US$8 million more to our employees, US$23 million more in taxes, and US$150
million more for goods and services to our Ukrainian suppliers. This means
that a broader US$180 million will instead be lost in economic contributions
to Ukraine.
It is with great sadness that during the first six months of 2025 one more
colleague was killed in action, whilst in early July we received notice that a
further colleague was killed, bringing the total to 48.Our thoughts are with
them and their families during this extremely difficult period. During the
first half of this year, 58 more colleagues were mobilised to serve in the
Armed Forces of Ukraine, whereas 26 colleagues were demobilised. This means
that at the end of June a total of 738 colleagues were serving, more than at
any time since the start of the full-scale invasion."
Production and financial summary
· Total commercial production for the first six months of 3.4 million
tonnes, a 7% increase compared to the previous six months to 31 December 2024,
and a 9% decrease compared to the first six months of 2024.
· Production mix comprised 64% pellets and 36% concentrates for the first
six months, compared to 88% pellets and 12% concentrates in the same period
last year, demonstrating an ability to be flexible depending on market demand
for different high grade iron ore products.
· Total sales for the first six months of 2025 of 3.8 million tonnes
(marginally lower compared to the same period last year) of which 60% was
exported through Ukrainian Black Sea ports, 35% by rail and 5% by river barge.
· Revenues decreased by 17% to US$453 million (1H 2024: US$549 million)
due to lower realised prices and marginally lower sales volumes.
· C1 Cash Cost of Production ("C1 costs") decreased to US$77.1 per
tonne in the half year (1H 2024: US$78.8 per tonne), due to reduced mining
activities, the effects from lower fuel prices, lower maintenance and a
reduction in personnel costs.
· Underlying EBITDA decreased by 95% to US$4 million (1H 2024: US$79
million), reflecting the net effects of lower sales volumes and realised
prices and higher production costs.
· Impairment loss of US$154 million.
· Loss after tax of US$196 million (1H 2024: profit US$55 million).
· The Group ended the period with a Net Cash position of US$50 million
(31 December 2024: US$101 million), comprising US$52 million of cash and cash
equivalents, and minimal financial debt of US$2 million.
· US$28 million capital investment for the period (1H 2024: US$55
million), comprising 55% in sustaining and 45% development capital.
· Formal written notifications of decisions not to refund VAT from the
Ukrainian tax authorities are being received on a monthly basis, typically two
months after the reporting month. From January to April 2025, the amount of
VAT refunds refused is US$31.1 million and for the period until the end of
June, the cumulative amount is $38.3 million.
· Due to the ongoing suspension of VAT refunds and the resulting
reduction in financial liquidity, the Group has been forced to downscale
operations to one pelletising line.
· The Group has worked extensively to lower its costs to remain
financially viable. This includes reducing working time for employees, cuts in
the procurement of goods services and a suspension of all non-essential CapEx,
overheads and Corporate & Social Responsibility ("CSR") spending.
Commenting on the financial results, Nikolay Kladiev, CFO, said:
"The refusal of the Ukrainian tax authorities to refund the VAT owed to us
since the start of 2025 has had a major impact on the operational and
financial performance of the Group. At the end of March, we received the first
notification that the VAT for the month of January would not be refunded, and
as of the date of these interim results we have subsequently received similar
notifications for the months up to April. Although we have made
representations to the relevant authorities in Ukraine to resume refunds, the
severe future effects are already clear. If one assumes that the refunds for
June are also denied, the total unpaid refunds for the first six months of
2025 will be US$38.3 million.
In our results, we book the VAT as a receivable because it is money owed to
us. Consequently, adding this to the net cash position of US$50 million as at
30 June, it is clear to see that the Group performed with resilience during
the first half of the year, given factors outside of our control such as
weaker iron ore prices and higher input costs. This resilience is, in part,
due to the cost cutting measures that we have implemented, including decisions
to cut non-essential capital expenditure which are easily made, though placing
part of our workforce on furlough or reduced hours are decisions that we do
not take lightly, and so I am grateful to colleagues for their understanding
and commitment.
As Lucio details in his statement, the broader economic impact of denying the
VAT refunds is significantly greater than the VAT amounts being withheld and
this will only shrink Ukrainian industry and the fiscal and economic
contributions that we collectively provide.
Looking to our results for the first half in more detail, although sales
volumes were relatively flat reflecting the strong first quarter, revenues
decreased 17% to US$453 million, reflecting lower realised market prices and
concentrate taking up a bigger portion of the product mix. The deep
cost-cutting measures that we implemented helped to drive down our costs on a
unit basis, buoyed by improvements in freight rates. As we guided when we
released our annual results, the Group recorded a non-cash impairment loss,
totalling US$154 million. The impairment relates to the suspension of VAT
refunds and the impact on the Group's long-term model to reflect the lower
expected cash flow generation which, in turn, has a negative impact on the
carrying value of the Group's assets in the future. Adjusting for the
impairment, the underlying EBITDA for the period was US$3.9 million, which, in
the face of so many challenges, is a resilient outcome. During the period,
we significantly reduced our CapEx programmes, with investments decreasing to
US$28 million, compared to US$55 million in the same period in 2024. The
significantly lower operating cash flow generation could, however, only be
partially offset by this and as a result, the closing balance of cash and cash
equivalents decreased from US$101 million at the end of 2024 to US$52 million
as at 30 June 2025."
Summary financial performance
US$ million (unless otherwise stated) 1H 2025 2H 2024 Change 1H 2024 Change FY 2024
Total commercial production (kt) 3,393 3,163 7% 3,727 (9)% 6,890
Total pellet production (kt) 2,170 2,774 (22)% 3,297 (34)% 6,071
Total commercial concentrate production (kt) 1,223 389 214% 430 184% 819
Total sales volumes (pellets and concentrates) (kt) 3,807 2,981 28% 3,849 (1)% 6,830
Average 65% Fe iron ore fines price (US$/t) 113 116 (3)% 131 (14)% 123
Revenue 453 384 18% 549 (17)% 933
C1 Cash Cost of production (US$/t) 77.1 89.9 (14)% 78.8 (2)% 83.9
Underlying EBITDA 4 -10 (140)% 79 (95)% 69
Net cash flow from operating activities (24) 36 (166)% 56 (143)% 92
Capital investment 28 47 (39)% 55 (49)% 102
Closing Net Cash 50 101 (51)% 112 (56)% 101
Health, safety and wellbeing
· The safety and wellbeing of the Group's workforce is the highest
priority, and the Group continues to take extensive measures to protect its
workforce, their families and local communities.
· During the first half, the Group reported a Lost Time Injury
Frequency Rate ("LTIFR") of 0.56, marginally above the historic five-year
trailing average of 0.52. The Group is proud to report zero fatalities for the
period, and over a total of 58 months.
Iron ore markets
· The benchmark 65% grade iron ore price weakened throughout the first
half of 2025 to close US$11 lower at US$104 per tonne.
· With continued access to Ukrainian Black Sea ports, 16 vessels were
loaded in the first half permitting 60% of all sales to seaborne customers,
with the balance of sales transported 35% by rail and 5% by river barge.
Ongoing geopolitical disruption in the Middle East however has kept freight
rates both volatile and high.
Operations and marketing
· During the first half of the year, the Group operated two out of four
pelletising lines in the first quarter, and one line in the second quarter, in
addition to a dedicated concentrate line.
· Total commercial production of 3,393 thousand tonnes was achieved, 7%
higher than the preceding six months and 9% lower than the same period last
year.
· The combined production of a range of Ferrexpo pellets totalled 2,170
thousand tonnes, combined with concentrate production of 1,223 thousand
tonnes, the majority of which were produced in the first quarter.
· Focus on higher-grade iron ore production continued during the first
half, with all pellets and concentrates grading 65% iron ore content or above.
Production and sales of FDP pellets also resumed.
· Sales volumes totalled 3,807 thousand tonnes, comprised of pellets
and commercial concentrate. This represents a 28% increase compared to the
previous six months to December 2024 and flat compared to the first six months
of 2024.
· The Group's C1 Costs decreased to US$77.1 per tonne in 1H 2025, due
to reduced mining activities, the effects from lower fuel prices and
consumption, as well as from lower maintenance and the reduction in personnel
costs.
· CapEx was deliberately reduced by limiting spend on development
projects and only funding necessary sustaining capital projects. Total CapEx
reduced to US$28 million (1H 2024: US$55 million).
Environment, social and governance
· During the first half, the Company was forced to cut back on its
humanitarian and CSR efforts due to limited funds. The Group does however
continue to keep employment open for returning veterans.
· Scope 1 and 2 absolute and unit emissions fell reflecting a decrease
in diesel consumption from the mining fleet and less natural gas in the
pelletising facilities as concentrates made a bigger part of the Group's
product mix.
· Later in the year, the Group intends to release its annual
'Responsible Business Report' for 2024.
Corporate governance
On 22 May 2025, Ferrexpo held its 2025 Annual General Meeting ("AGM"), at
which the majority of the resolutions were passed. However, more than 50% of
the independent shareholder votes were cast against the re-election of one of
the Company's Independent Non-Executive Directors. Consequently, Ferrexpo
announced that the Board intends to consult and engage with shareholders to
better understand the reasons behind these votes and put the matter to a
second vote of all shareholders within 120 days of the AGM.
On 11 January 2025, Non-executive Director Natalie Polischuk resigned from the
Board of Ferrexpo Plc with immediate effect. Natalie was Chair of the Health,
Safety, Environment and Communities ("HSEC") Committee, a member of the Audit
Committee and a member of the Committee of Independent Directors.
On an interim basis, Fiona MacAulay, Senior Independent Non-executive Director
was appointed a member of the Audit Committee and also appointed as a member
of and will Chair the HSEC Committee.
Following Ms Polischuk's resignation, the Board continues to have a majority
of independent Non-executive Directors. As previously announced, the Company
has an ongoing process to search for a new independent Non-executive Director
and as part of this search, the Company will also take into account ethnic and
gender diversity on the Board.
For further information please contact:
Ferrexpo:
Nick Bias n.bias@ferrexpo.ch +44 (0)7733 177 831
(mailto:n.bias@ferrexpo.ch?subject=Interim%20Results%202025)
Tavistock:
Jos Simson ferrexpo@tavistock.co.uk +44 (0)20 7920 3150
(mailto:ferrexpo@tavistock.co.uk?subject=Interim%20Results%202025)
Gareth Tredway +44 (0)7899 870450
About Ferrexpo:
About Ferrexpo: Ferrexpo is a Swiss headquartered iron ore company with assets
in Ukraine and a listing in the equity shares commercial companies category on
the London Stock Exchange (ticker FXPO) and a constituent of the FTSE
All-Share index. The Group produces high grade iron ore products, which are
premium products for the global steel industry and enable reduced carbon
emissions and increased productivity for steelmakers when converted into
steel, compared to more commonly traded forms of iron ore. Ferrexpo's
operations have been supplying the global steel industry for over 50 years.
Before Russia's full-scale invasion of Ukraine in February 2022, the Group was
the world's third largest exporter of pellets. The Group has a global customer
base comprising of premium steel mills around the world. For further
information, please visit www.ferrexpo.com (http://www.ferrexpo.com/) .
Notes:
Please note that numbers may not add up due to rounding. In reporting
financial performance, financial position and cash flows, reference is made to
Alternative Performance Measures ("APMs") that are not defined or specified
under International Financial Reporting Standards ("IFRSs"). APMs are not
uniformly defined by all companies, including those in the Group's industry.
Accordingly, the APMs used by the Group may not be comparable with similarly
titled measures and disclosures made by other companies. APMs should be
considered in addition to, and not as a substitute for or as superior to,
measures of financial performance, financial position or cash flows reported
in accordance with IFRSs. Ferrexpo refers to the following APMs in the Group's
Interim Results: C1 Cash cost of production, Underlying EBITDA, Net
cash/(debt), Capital investment, and Total Liquidity. Full definitions of the
Company's APMs can be found in the Annual Report & Accounts.
Introduction
The war in Ukraine, now in its fourth year, continues to dominate Ferrexpo's
workforce and operations.
At the end of June 2025, 738 colleagues were serving in the Armed Forces of
Ukraine, more than at any time since the start of the full-scale war.
Tragically, as at the end of June 2025, 47 of our colleagues have been killed
serving in the Armed Forces since the start of the full-scale invasion in
February 2022. We mourn their passing and honour their selfless and brave
strength. As at the end of June 2025, 186 colleagues had been demobilised from
the Armed Forces, of whom 98 have completed the veteran rehabilitation
programme of whom 78 have returned to work.
It is important to recognise that our workforce is operating in extremely
challenging conditions. Loved ones, friends and colleagues are serving in the
Armed Forces, whilst they are living and working under a constant threat of
aerial attack. The number of drone and missile attacks have escalated sharply
in frequency and intensity in the Poltava region this year.
The health and safety of our workforce is paramount, as is the social
contribution that we can offer in our communities, and to Ukraine as a whole.
Sustaining employment in as safe a manner as possible supports livelihoods and
helps foster more resilient communities better weather the challenges of a
prolonged war.
Since the full-scale invasion of Ukraine in February 2022, Ferrexpo has
significantly changed the way it operates. The lack of access to Ukrainian
Black Sea ports until the end of last year forced us to pivot our sales
towards European customers via rail. Concurrently, the business was right
sized to operate at lower production levels due to logistics constraints. The
business also had to adapt to constant new challenges, including conscription,
establishing alternative procurement channels for important inputs and
interruptions to energy supplies. Rising to the challenges has resulted in a
business that is adaptive to change and flexible in how it can meet its
customers' needs. It is in itself a demonstration of resilience that is
testament to the hard work and determination of our people.
Sales volumes totalled 3.8 million tonnes, comprised of pellets, commercial
concentrate and pellet feed. This represents a 28% increase compared to the
previous six months to December 2024 and an 1% decrease compared to the first
six months to June 2024.
The Group continued to benefit from access to Ukrainian Black Sea ports to
export its products by sea to customers in Asia and the MENA region, and to
customers in Europe who prefer deliveries by sea instead of by rail or river
barge. In total 60% of the sales were exported by sea during the period
compared to 53% in the previous six months and 47% in the same period last
year.
In total, 16 vessels were loaded with Ferrexpo cargoes from Ukrainian ports
during the period under review. Of total sales, 50% were to Asian customers,
38% to European customers and the balancing 12% to customers in the MENA
region.
Sales volumes increased compared to the previous six months though were flat
compared to the same period last year. However, the 65% Fe iron ore index fell
10% over the period resulting in revenue of US$453 million, an 18% increase
compared to previous six months, and a 17% decrease compared to the same
period last year when iron ore prices were significantly higher. As published
in the Annual Report and Accounts in April 2025, the Group recorded a non-cash
impairment loss, which totalled US$154 million. Adding back the impairment,
the underlying EBITDA for the period was US$3.9 million, which is considered a
resilient performance. The Group's result for the first half of 2025 amounts
to a loss of US$196 million, mostly attributable to the impairment loss. This
compares to a profit of US$55 million in the same period in 2024.
For a detailed review of iron ore markets, see the section 'Sales and
Marketing Review' below and for the Group financials, see the 'Financial
Review' section.
Outlook
The outlook for the second half of 2025 is challenging. During the second
quarter of the year, management moved hard and fast to streamline the business
to a sustainable basis by building operational resilience and preserving
cash. This strategy has resulted in a situation where the business is
performing financially on a marginally positive EBITDA basis. In July iron ore
prices staged a small recovery, with the 65% Fe benchmark averaging US$116 per
tonne in the final week of July 2025, 12% higher than the price at the start
of the month. These prices provide some comfort; however, without the refund
on VAT that is owed to us, the business will need to continue operating at
reduced levels. Representations are being made to the Ukrainian authorities to
restore VAT refunds, in addition to other international stakeholders.
Should this be secured, the ambition is to add back capacity, return those on
reduced hours and furlough back to the workplace, and increase the social and
economic contributions to Ukraine.
Shareholder returns
Given the reduced financial liquidity of the Group, the Board of Directors
have elected not to declare an interim dividend for 2025 at this time because
this would affect the Group's ability to continue as a going concern as
disclosed in Note 2 Summary of material accounting policies and Note 19
Commitments, contingencies and legal disputes to these interim condensed
consolidated financial statements.
Sales and Marketing Review
Iron ore supply, demand and prices
Following the seasonal rally in iron ore prices towards the end of last year,
prices drifted lower through the first half of 2025, with the benchmark 65% Fe
price closing 10% lower at the end of the period.
Iron ore prices (US$/t)
The first quarter of 2025 saw a moderately elevated price environment for iron
ore due to weather-related supply disruptions from major exporting countries,
Australia and Brazil. This resulted in some tightening of supplies at a time
when seasonal restocking in China ahead of the Chinese New Year holiday was
underway. This was also supported by mid-to-high grade price spreads on iron
ore averaging US$13 per tonne at the time.
In the second quarter of 2025 however, the major iron ore producers ramped up
exports, incentivised by favourable weather conditions and a relatively
subdued freight market. Despite good demand and higher levels of steel
production levels in China as the peak construction season approached, the
growth in supply outweighed the seasonal demand peak, putting pressure on
prices, evidenced in a 7% fall in the benchmark 65% Fe price and the 62 - 65%
Fe spreads narrowing by 20%.
Industry commentators have been quick to note signs of improvement in July,
which is reflected in our continued sales to China, however, the outlook
remains uncertain.
Pellet premiums
Pellet premiums remained suppressed in the first half of 2025 as idled
capacity from large pellet exporters globally came back online, resulting in
increased supply pressure on the market. Combined with relatively lacklustre
demand in the Atlantic blast furnace markets, the Atlantic pellet premium in
the first half of 2025 fell to five-year lows; while suppressed steel margins
in China failed to support pellet premiums in Asian markets.
Following a sustained period of lower pellet premiums, a reduction in pellet
exports is expected in the second half following announcements of capacity
cuts by some large players which could result in tighter supply and lend some
support to pellet premiums.
Customer development
The Group has continued to export via Ukrainian Black Sea ports since access
was restored in late 2023. Responding to relatively stronger demand for
high-grade pellet feed concentrate in Asia, the Group once again demonstrated
flexibility by increasing concentrate production and fixing 11 capesize
vessels to Asia (out of a total 16 vessels) during the period, compared to
just four in the same period last year.
Improvements in product specifications enabled by quality improvement projects
at site has also allowed the Group to continue expanding its sales of FDP to
new customers in the Middle East region in the first half of 2025, further
developing its footprint in the low-emissions direct reduction steelmaking
sector.
Freight
The C3 freight rate (Capesize freight rate from Brazil to China), is used as a
reference when pricing the Group's sales. C3 rates in the first half 2025
remained relatively low at US$20 per tonne (1H 2024: US$26 per tonne) due to
weather-related supply disruptions in Brazil. It is also interesting to note
that as the perceived risks around shipping from Ukraine ease, the Group has
observed a material decrease in freight rates shipping from Ukraine relative
to international freight benchmarks, as more ship owners express interest to
operate this route.
FINANCIAL REVIEW
Ongoing legal disputes and new adverse actions in Ukraine with significant
impact on the Group's business activities and cash flow generation in the
first half of 2025
Summary
Despite the unpredictable situation in Ukraine due to the ongoing war, the
Group showed strong momentum at the beginning of the year, resulting in the
Group's best quarterly production in the first quarter since the full-scale
invasion in February 2022. This strong momentum was, however, significantly
curtailed in the second quarter as the Group started to experience the full
impact of the Ukrainian tax authorities' decisions to suspend the refund of
VAT to the Group's Ukrainian subsidiaries.
In response to the rejection of VAT refunds, the Group adjusted its production
volumes in the second quarter to minimise the negative impact on the Group's
cash flow and available cash equivalents. Lower production volumes resulted in
lower sales volumes, which has an adverse effect on the Group's profitability
and cash flow generation.
The Group reported a loss for the first half of 2025 of US$196 million, which
includes an impairment in the amount of US$154 million on the Group's
non-current operating assets recorded as at 30 June 2025. The impairment
primarily results from a non-adjusting post balance sheet event, which was
disclosed in the Group's 2024 Annual Report & Accounts.
In the first quarter of 2025, the Group operated an average of two pellet
lines, reducing to a single pellet line for reasons described above in the
second quarter. This affected the Group's production costs on a per tonne
basis. Throughout the second quarter, the Group worked extensively to lower
its cost base to remain financially viable. This included placing
approximately 37% of employees on reduced working time or on furlough, further
cuts in procurement of goods and services and a suspension of all
non-essential capital expenditures.
The index prices for 65% Fe iron ore fines averaged US$113 per tonne in the
first quarter on a similar level as in the fourth quarter 2024, before
weakening by approximately 8% in the second quarter, due to increased supply
and concerns about global trade. This ultimately affected realised margins and
cash flow generation.
The Group ended the first half of 2025 with a net cash position of US$50
million (31 December 2024: US$101 million). The capital expenditures for the
first half of 2025 totalled US$28 million, significantly less than the US$55
million in the same period last year.
Key Financial Performance Indicators
US$ million (unless stated otherwise) 1H 2025 1H 2024 Change FY 2024
Total pellet production (kt) 2,170 3,297 (34%) 6,071
Total pellet and concentrate production (kt) 3,393 3,727 (9%) 6,890
Total sales volumes (kt) 3,807 3,849 (1%) 6,830
Iron ore price (65% Fe Index, US$/t)(1) 113 131 (14%) 123
Revenue 453 549 (17%) 933
C1 cash cost of production (US$/t) 77.1 78.8 (2%) 83.9
Underlying EBITDA(A) 4 79 (95%) 69
Underlying EBITDA(A) margin 1% 14% (13pp) 7%
Capital investment(A) 28 55 (49%) 102
Closing net cash 50 112 (56%) 101
Revenue
Revenue decreased by 17% to US$453 million in the first half of 2025 (1H 2024:
US$549 million), primarily due to lower realised prices and marginally lower
sales volumes. Whilst total sales volumes were 42 thousand tonnes lower at 3.8
million tonnes, there was a significant shift in the ratio of pellets to
concentrate produced as the Group responded to strong Chinese demand for its
high-grade low-alumina iron ore concentrate. As a result, concentrates
represented 32% of the Group's sales in the first half of 2025, three times
more than in the same period a year ago. Revenue in the first half of 2025 was
therefore primarily affected by a 14% decline in the average benchmark iron
ore price (65% Fe) and a 15% drop in the average Atlantic pellet premium. At
the same time, the average index rates for international freight decreased by
22% to US$20.1 per tonne compared to US$25.8 per tonne in the same period in
2024. The net effect of changes index prices, pellet premiums and freight
rates lowered the Group's net back realised prices for sales under the
International Commercial Terms ("Incoterms") of FOB ("Free on Board").
The Group continued to benefit from the availability of the Ukrainian Black
Sea ports and seaborne sales remained stable at 2.1 million tonnes.
Iron ore prices
US$ per tonne 1H 2025 1H 2024 Change FY 2024 Change
Average 62% Fe iron ore fines price 100.8 117.3 (14%) 109.4 (8%)
Average 65% Fe iron ore fines price 112.6 130.7 (14%) 123.4 (9%)
Average 62%/65% spread 11.8 13.4 (12%) 14.0 (16%)
The changes of iron ore fines prices in the first half of 2025, compared to
the same period in 2024, are reflecting a balance between cautious demand and
ample supply. The demand is currently affected by ongoing trade tensions and
increased barriers to trade on steel. This effect is exacerbated by high port
stockpiles, reducing the urgency to restock, and increasing production volumes
in Australia and Brazil ahead of new projects in other countries that will
become operational soon. As a result, the overall supply growth outpaced the
demand in the first half of 2025. This is also likely to be the case in the
second half of 2025, as possible fiscal or economic measures will not be able
to offset the ongoing structural weakness of the steel and property sector.
For more information on the market factors influencing pricing of the Group's
products and logistics, please see the Market Review section.
C1 cash cost of production
Cost of sales in first half of 2025 totalled US$311 million, compared to
US$314 million in the same period in 2024. The decrease is mainly due to the
lower total production as result of the rejection of VAT refunds in Ukraine,
so that the Group had to adjust its production volumes in the second quarter
to minimise the negative impact on the Group's cash flow and available cash
balance. The total production volume for pellets and concentrates decreased by
9% to 3.4 million tonnes, compared to 3.7 million tonnes in the comparative
period last year. Because of the rejected VAT refunds and changing market
conditions, the Group assessed and adjusted its production split to generate
the best possible returns under the changed circumstances. This resulted in a
decrease of the volume of pellets produced by 34% to 2.2 million tonnes (1H
2024: 3.3 million tonnes), and an increase of the volume of concentrate
produced by 184% to 1.2 million tonnes (1H 2024: 0.4 million tonnes). As in
previous years since the start of the full-scale invasion of Ukraine, the
Group's production costs are still affected by higher prices for raw materials
such as gas and electricity, whereas the Group benefited from lower fuel
prices as well as an overall cost reduction programme.
In the first half of 2025, the Group continued focusing on lowering its cost
base to remain financially viable. As a result, production was downscaled from
an average of two pellet lines in the first quarter to a single line in the
second quarter. As a result, approximately 37% of employees were placed on
reduced working time or on furlough, and further cuts were made to the Group's
repair and maintenance programme and its mining operations.
The C1 cash cost of production ("C1 costs") reflects the Group's operating
costs for the production of iron ore pellets, with a breakdown of the
different cost components shown in the table below.
The Group's average C1 costs decreased to US$77.1 per tonne in the first half
of 2025, compared to US$78.8 per tonne in same period in 2024. The total costs
per tonne were lower, principally due to reduced mining activities, the
effects from lower fuel prices and consumption, as well as from lower
maintenance and the reduction in personnel costs. These cost efficiencies were
partially offset by higher prices for electricity, gas and materials, further
affected by a slight appreciation of the local currency in Ukraine to the US
dollar.
The main C1 costs drivers are the prices of electricity, natural gas and
diesel, which are outside of the Group's control and still affected by the
ongoing war in Ukraine. The Group continued to experience a sharp increase in
electricity prices due to the currently weak power generation and distribution
facilities in Ukraine as a result of continued Russian attacks. The decreased
mining and maintenance activities in the first half of 2025 resulted in a
lower proportion of diesel consumption and repair costs. Another important
component of the Group's C1 costs that is also outside of the Group's control
relates to royalties in Ukraine, which accrue and are paid based on a tiered
system. According to this regime, royalties are calculated based on the
benchmark index price for a medium-grade (62% Fe) iron ore fines price and
computed based on the cost of different iron ore products. The rate varies
between 3.5%, 5.0% and 10.0% depending on the benchmark index price for 62%
Fe. The royalty expense totalled US$14 million in the first half of 2025,
compared to US$20 million in the same period in 2024, driven mainly by the
lower production volume and the effect of lower average index prices in the
first half of 2025.
Group operating costs, denominated in Ukrainian hryvnia ("UAH"), account for
approximately two thirds of the Group's C1 costs. Consequently, changes in
hryvnia to dollar rates can have a significant impact on the Group's operating
costs, including the C1 costs. Historically, the Group's C1 costs benefited
from a devaluation to the US dollar, whereas in the first half of 2025, the
UAH marginally appreciated to the US dollar, compared to a devaluation of 7%
in the same period in 2024, putting additional pressure on the Group's C1
costs.
The Group's C1 costs per tonne represent the cash cost of the production of
iron pellets from ore, divided by the production volume. The C1 costs exclude
non-cash costs such as depreciation, pension costs and inventory movements.
Following the sharp increase of the volume of concentrate produced in the
first half of 2025, the computation of the C1 costs per tonne was amended so
that only the costs related to the pellet production are divided by the volume
of produced pellets, whereas the computation of C1 costs per tonne of the
comparative period was based on the total costs divided by the volume of
produced pellets. The C1 cash cost of production (US dollars per tonne) is
regarded as an Alternative Performance Measure ("APM").
Breakdown of C1 costs
The Group's business is very energy intensive, and the main C1 costs
components are electricity, natural gas and diesel, which collectively
represent 49% (1H 2024: 45%) of the total cost base as presented in the chart
below with changes and the proportions of the different cost components.
In the first half of 2025, the proportion of C1 costs per tonne for
electricity increased by 7% to 34% (1H 2024: 27%), as the effect from higher
electricity prices was exacerbated by the lower production volume. The average
electricity price in Ukraine in the first half of 2025 increased by 28% in US
dollar terms to an average of US$147 per megawatt-hour ("MWh"), peaking at
US$173 per MWh in February 2025, then steadily decreasing in the second
quarter to US$136 per MWh in June 2025. This compares to an average of US$115
per MWh in the first half of 2024. The proportion of natural gas increased to
9% (1H 2024: 7%) due to higher prices on the global markets, partially offset
by lower consumption due to an increase in the production of concentrates
resulting in less gas being required for pelletising, whereas the proportion
of fuel decreased from 11% in the first half of 2024 to 6%, mainly due to the
Group's decreased mining activities in the first half of 2025. The average
prices for oil (Brent) and natural gas, both in US dollar terms, were 8% lower
and 32% higher in the first half of 2025, compared to opposite effects of 4%
higher and 23% lower in the first half of 2024.
The increase in the proportion for materials from 13% in the first half of
2024 to 17% in the first half of 2025 is mainly due to a higher volume of
concentrate purchased from third party suppliers, as well as the effects of
local inflation and the marginal appreciation of the Ukrainian currency. The
slight decrease in the proportion of personnel expenses from 9% in the first
half of 2024 to 8% in the first half of 2025 is largely driven by the
increased proportion of employees placed on reduced working time or on
furlough, partially offset by adjustments increases in salaries and the
payment of bonuses made to the workforce in Ukraine.
Due to the ongoing war in Ukraine and the absence of VAT refunds, which have
led to lower production volumes, the Group reduced its maintenance and repair
programme for its mining and processing equipment compared to the first half
of 2024. See section "C1 cash cost of production" for further information on
the Group's production costs.
C1 Costs breakdown
US$ per tonne 1H 2025 1H 2024 Change FY 2024 Change
Electricity 34% 27% 7% 32% 2%
Natural gas and sunflower husks 9% 7% 2% 7% 2%
Fuel (including diesel) 6% 11% (5%) 9% (3%)
Materials 17% 13% 4% 12% 5%
Personnel 8% 9% (1%) 8% -
Maintenance and repairs 14% 17% (3%) 17% (3%)
Grinding media 5% 6% (1%) 6% (1%)
Royalties 6% 8% (2%) 7% (1%)
Explosives 1% 2% (1%) 2% (1%)
The numbers above are rounded to full decimals
Selling and distribution costs
Total selling and distribution costs decreased to US$133 million in the first
half of 2025, compared to US$148 million in the same period in 2024, primarily
driven by lower freight tariffs on seaborne sales. Seaborne logistics routes
are generally the lowest cost and most efficient way to deliver the Group's
products to customers. During the first half of 2025, the index rates for
international freight averaged 22% lower at US$20.1 per tonne compared to
US$25.8 per tonne in the same period in 2024. The Group's seaborne sales,
mainly under CFR ("Cost and Freight") and CIF ("Cost, Insurance and Freight")
Incoterms, remained stable at 2.1 million tonnes, as the Group continued to
benefit from access to Ukrainian Black Sea ports. However, in the first half
of 2024, this volume included 0.3 million tonnes sold under FOB ("Free on
Board") terms, where the customer bears responsibility for the freight (1H
2025: nil). As a result of the generally lower freight rates, partially offset
by a higher proportion of shipments under CFR and CIF Incoterms, the Group's
international freight costs decreased to US$70 million, compared to US$74
million during the same period in 2024. In addition to the international
freight costs, the Group's selling and distribution costs are also dependent
on the level of domestic Ukrainian logistics costs, such as railway tariffs
and port charges. In general, the Group's logistics costs continue to be
affected by the ongoing war in Ukraine, including higher insurance premiums
than before the war. However, the Group benefited from a decrease of the
insurance premiums in the first half of 2025, also due to rebates as a result
of the volumes insured in 2024, resulting in a decrease of the freight
insurance costs to US$1 million, compared to US$5 million in the same period
in 2024.
The Ukrainian rail network is essential to delivering the Group's products to
Black Sea ports and to the Western border of Ukraine. Following war-related
congestions in 2022 and 2023, the situation continued to improve in 2024 and
2025 and rail tariffs in Ukraine remained unchanged during the first half of
2025, compared to the rates during the financial year 2024. A hefty 70%
increase of the rail tariffs was imposed in July 2022, and a potential new
increase are being touted, without a decision made as at the approval of these
interim condensed consolidated financial statements.
General and administrative expenses
General and administrative expenses in the first half of 2025 decreased to
US$31 million, compared to US$32 million in the same period in 2024. Following
the rejection of the VAT refunds, the Group worked extensively throughout the
second quarter of 2025 to lower its cost base. Measures taken include placing
approximately 37% of employees in Ukraine on reduced working hours or
furlough. General and administrative expenses also include legal and
consulting costs totalling US$8 million (1H 2024: US$9 million), which are in
connection with ongoing legal proceedings against the Group in Ukraine.
See Note 19 Commitments, contingencies and legal disputes to these interim
condensed consolidated financial statements for the current environment in
Ukraine facing the Group, and further information on the ongoing legal
challenges and disputes of the Group in Ukraine.
Other operating expenses
Other operating expenses increased to US$166 million in the first of half
2025, compared to US$14 million in the comparative period in 2024. This
increase is predominantly due to a non-cash impairment loss of US$154 million
recorded as at 30 June 2025 on the Group's non-current operating assets,
including property, plant and equipment, intangible assets and other
non-current assets, which was allocated to various asset categories within
property, plant and equipment. The recorded impairment loss was expected as
disclosed in the Group's 2024 Annual Report & Accounts as a non-adjusting
post balance sheet event in relation to the rejection of VAT refunds in
Ukraine. As a result, the Group adjusted its production plan to mitigate the
effect from VAT related working capital outflows and to preserve its available
cash balance, affecting also the Group's cash flow generation, which forms the
basis of the impairment test.
Currency
Ferrexpo prepares its accounts in US dollars. The functional currency of the
Group's operations in Ukraine is the Ukrainian hryvnia, as approximately two
thirds of the Group's operating costs are historically denominated in local
currency.
The local currency appreciated marginally from 42.039 at the beginning of 2025
to 41.641 as at 30 June 2025, with an average exchange rate of 41.631 in the
first half of 2025 (1H 2024: 39.009).
With the continuation of Martial Law in 2025, the National Bank of Ukraine
("NBU") has continued to maintain significant currency and capital controls to
manage the local currency. As a result, there are limitations to converting
balances in local currency into US dollars, and to transferring US dollars
between onshore and offshore accounts of the Group.
See Note 19 Commitments, contingencies and legal disputes to these interim
condensed consolidated financial statements for further information.
Ukrainian hryvnia : US dollar(1)
Spot 04.08.25
41.764
Opening rate 01.01.25
42.039
Closing rate 30.06.25
41.641
Average 1H 2025
41.631
Average 1H 2024
39.009
1 Source: National Bank of Ukraine
Operating and non-operating foreign exchange losses/gains
The functional currency of the Ukrainian subsidiaries is the hryvnia.
Historically, the devaluation of the hryvnia against the US dollar resulted in
foreign exchange gains on the Group's Ukrainian subsidiaries' US dollar
denominated receivable balances from the sale of iron ore products. In the
first half of 2024 the local currency in Ukraine slightly appreciated against
the US dollar resulting in operating foreign exchange losses of US$7 million,
compared to gains of US$55 million in the same period in 2024, when the
hryvnia depreciated.
Non-operating foreign exchange gains of US$8 million in the first half of
2025, compared to losses of US$25 million in the same period of 2024, also due
to the appreciation of the hryvnia and primarily relating to the translation
of US dollar denominated loan payable balances of the Group's Ukrainian
subsidiaries.
For further information on the operating foreign exchange gains and the
non-operating foreign exchange losses, please see Note 6 Foreign exchange
gains and losses to these interim condensed consolidated financial statements.
Underlying EBITDA
The Group's underlying EBITDA remained positive at US$4 million for the first
half of 2025, despite the loss for the period, although this is significantly
lower than in the same period in 2024 (1H 2024: US$79 million). The sharp
decline is mainly due to lower operating profits resulting from the adjusted
lower production plan following the rejection of VAT refunds in Ukraine and
lower realised prices, which could not be offset by the effects from lower C1
production costs and the further cost-cutting measures initiated by the Group
during the second quarter of 2025.
Underlying EBITDA is an Alternative Performance Measure ("APM").
Net finance expense
The Group's finance expenses in the first half of 2025 remained stable at US$2
million, compared to the same period in 2024.
With the exception of lease liabilities, the Group does not have any
outstanding interest-bearing loans and borrowings, therefore no interest
expenses on finance facilities were incurred. As in the prior year, the
majority of finance expense relates to the calculated interest on the Group's
pension scheme, without any cash outflow effects, and to bank charges. At the
same time, interest income decreased from US$2 million in the first half of
2024 to US$1 million in the first half of 2025. Interest income is derived
from the available funds invested in deposits and depends on interest rates on
the global financial markets and the funds invested.
Further details on finance expense are disclosed in Note 7 Net finance expense
to these interim condensed consolidated financial statements.
Income tax
The Group's income tax expense decreased to US$9 million, compared to US$20
million in the same period in 2024. The lower income tax expense is due to the
fact that some of the Group's subsidiaries realised losses in the first half
of 2025. The income tax expense also includes the effect of an additional
allowance of US$3m recorded on deferred tax assets recognised in Ukraine. The
Group's overall loss position is due to a significant impairment loss recorded
as at 30 June 2025 on the Group's non-current assets, which is mainly
allocated to the Group's operations in Ukraine and required downscaling of the
Group's operations. Both effects are the result of the adjusted production
plan following the rejection of VAT refunds in Ukraine, affecting the Group's
cash flow generation and profitability.
The effective tax rate as of 30 June 2025 is affected by the additional
impairment loss of US$154 million on the Group's non-current operating assets,
which is primarily allocated to the Group's operations in Ukraine, and the
effect from extracted low grade ore totalling US$12 million, which are both
not tax deductible in Ukraine. As a consequence, there is no deferred tax
effect recognised as it was done in the past.
The effective tax rate for the first half of the 2025 financial year was
positive at 4.9% and therefore not comparable to previous periods. The reason
for the positive effective tax rate is that the Group is in a loss position
even before the significant impairment charge and no deferred tax assets on
the resulting tax loss carry forwards were recognised, as it is currently
uncertain whether the Group's subsidiaries in the various countries will be
able to benefit from them in the near future.
The lower production volumes affecting the Group's overall profitability also
had an adverse impact on the taxes to be paid in the different jurisdictions,
but mainly in Ukraine. As a result of the lower profitability in the different
jurisdictions, the income tax paid by the Group decreased to US$3 million,
compared to US$13 million in the same period in 2024, of which US$10 million
was paid in Ukraine. The income tax paid in the first half of 2025 includes
withholding tax on intercompany interest payments totalling US$1 million (1H
2024: US$2 million), to be considered as income tax payments and paid in
Ukraine. Further details on taxation are disclosed in Note 8 Taxation to these
interim condensed consolidated financial statements.
Items excluded from underlying earnings
In addition to the usual adjustments made to the underlying EBITDA, the figure
for the first half of 2025 was adjusted as at 30 June 2025, considering the
non-cash effect of the US$154 million impairment loss. The impairment loss was
to be expected and results from a non-adjusting post balance sheet event,
which was disclosed in Note 35 Events after the reporting period included in
the Group's 2024 Annual Report & Accounts.
See Note 10 Property, plant and equipment to these interim condensed
consolidated financial statements for further details.
Loss for the half year
The Group's result for the first half of 2025 amounts to a loss of US$196
million, mostly attributable to the US$154 impairment loss. This compares to a
profit of US$55 million in the same period in 2024. The loss is also
attributed to lower pellet sales volumes and lower iron ore prices and higher
prices for energy and key consumables.
Cash flows and cash equivalents
Operating cash flow before changes in working capital decreased by 94% to US$5
million, compared to US$82 million in the same period in 2024. The lower
operating cash flow generation is the result of the adjusted production plan
following the rejection of VAT refunds by the Ukrainian tax authorities since
March 2025. In terms of the working capital, there was an overall outflow of
US$24 million, compared to US$12 million in the same period in 2024. The net
outflow was largely driven by an increase in the trade receivables balance due
to increased sales volumes in June 2025, whereas the decrease of inventories
and the increase of taxes recoverable are linked to the adjusted production
plan mentioned above. Since March 2025, the Group's subsidiaries in Ukraine
did no longer receive VAT refunds, resulting in a sharp increase in the
outstanding VAT balance as at 30 June 2025 and further increases are to be
expected until VAT refunds resume.
The net cash flow from operating activities was negative at US$24 million,
compared to positive at US$56 million in the same period in 2024. The effect
from the lower operating cash flow was accentuated by working capital outflows
as at 30 June 2025.
During the first half of 2025, the Group significantly reduced its capital
expenditure programme, with investments decreasing to US$28 million, compared
to US$55 million in the same period in 2024. See the Capital investment
section below for further information.
The significantly lower operating cash flow generation could only be partially
offset with the initiated decrease of capital expenditures. As a result, the
closing balance of cash and cash equivalents decreased to US$52 million as at
30 June 2025, compared to US$106 million as of 31 December 2024.
The balance of cash and cash equivalents held in Ukraine amounts to US$2
million as at 30 June 2025 (31 December 2024: US$4 million). Following the
adoption of Martial Law in Ukraine, currency and capital control restrictions
were introduced in Ukraine by the NBU, which are still in place. Although
these measures were softened by the regulator in 2024, they are still
affecting the Group in terms of its ability to make cross-border payments,
which may be carried out only in exceptional cases.
For further information see Note 19 Commitments, contingencies and legal
disputes to these interim condensed consolidated financial statements.
Capital investment
Capital expenditure in the first half of 2025 totalled US$28 million compared
to US$55 million in the same period in 2024. Of the total amount spent in the
first half of 2025, sustaining and modernisation capital expenditure totalled
US$15 million (1H 2024: US$19 million), covering the activities of all of the
Group's major business units, and investments in strategic development
projects totalled US$13 million (1H 2024: US$36 million). The significant
decrease of the capital expenditures reflects the Group's extensive work to
reduce all non-essential capital expenditures following the rejection of VAT
refunds by the tax authorities in Ukraine since March 2025.
Since the beginning of the war, the Group continuously reviewed and optimised
the level and timing of its capital expenditure programme to ensure the
reliability of operations in Ukraine and to avoid unexpected downtimes. The
recent rejection of VAT refunds required more extensive cuts, albeit primarily
for strategic development projects, whereas the sustaining and modernisation
capital expenditures remained on a similar level as in the comparative period
in 2024.
Following the rejection of VAT refunds, the Group significantly reduced its
investments in strategic development projects, which decreased to US$13
million, compared to US$36 million in the same period in 2024. The largest
capital investments included additional funds for the new press filtration
complex and a new concentrate conveyer line along the production circuit,
which totalled US$5 million and US$3 million, respectively. The purpose of
these projects is the increase of the production of high-grade iron ore
products so that the business can build flexibility into its production mix
and be more nimble adapting to short-term changes in demand for different
products. The Group also funded US$2 million on stripping activities for
future production and US$1 million on the development and exploration at the
Belanovo Mine.
Considering the fall in cash flow generation, which is affected by the
rejection of VAT refunds and continued effects from the ongoing war in
Ukraine, no ordinary dividends were declared or paid during the first half of
the financial years 2025 and 2024. The Group has a shareholder returns policy
outlining the Group's intention to deliver up to 30% of free cash flows as
dividends in respect of a given year. The Group's ability to make dividend
payments also depends on developments in respect of the ongoing legal disputes
in Ukraine.
For further information see Note 19 Commitments, contingencies and legal
disputes to these interim condensed consolidated financial statements.
Debt and maturity profile
The Group is doing everything it can to maintain a robust balance sheet, being
essentially debt free, with a net cash position of US$50 million as at 30 June
2025 (31 December 2024: US$101 million). With the exception of lease
liabilities, the Group did not have any outstanding interest-bearing loans and
borrowings as of 30 June 2025 and 31 December 2024.
As of 30 June 2025, the credit rating agency S&P had a corporate and debt
rating for Ferrexpo of CCC, with a negative outlook. The credit ratings agency
Moody's had a long-term corporate and debt rating for Ferrexpo of Caa3, with a
negative outlook. The credit ratings agency Fitch maintains a CCC- with a
negative outlook rating for the Group. While the credit rating of Ferrexpo is
capped by the sovereign credit rating of Ukraine, the ceilings for credit
ratings ascribed to Ferrexpo by S&P, Moody's and Fitch are higher (four
notches above sovereign, SD, for S&P, one notch above sovereign, Ca, for
Moody's and three notches above sovereign, RD, for Fitch).
Related party transactions
The Group enters into arm's length transactions with entities under the common
control of Kostiantyn Zhevago and his associates. All these transactions are
considered to be in the ordinary course of business.
During the first half of 2025, the Group made a bail payment of UAH5 million
(approximately US$120,000) (1H 2024: US$1 million) on behalf of one member of
the top management (1H 2024: one) of one of the Group's subsidiaries in
Ukraine in respect of various legal actions and ongoing court proceedings
initiated by certain governmental bodies against the Group's subsidiaries and
members of the senior management in Ukraine.
See also section below, Note 19: Contingent liabilities and legal disputes and
Note 21 Related party disclosures to these interim condensed consolidated
financial statements for further details.
Contingent liabilities and legal disputes
The Group is exposed to risks associated with operating in a challenging
environment in Ukraine during a time of war and the current circumstances
facing Mr Zhevago. As a result, the Group is subject to various legal actions
and ongoing court proceedings initiated by different government agencies in
Ukraine. There is a continued risk that the independence of the judicial
system, and its immunity from economic and political influences in Ukraine may
not be upheld. Consequently, Ukrainian legislation might be applied
inconsistently to resolve the same or similar disputes. As a result, the Group
is exposed to a number of higher risk areas than those typically expected in a
stable economy, which require a significant portion of critical judgements to
be made by management.
In respect of the ongoing contested sureties claim before the Supreme Court of
Ukraine, several court hearings took place in the first half of 2025 without a
final Supreme Court ruling. As at the date of the approval of these interim
condensed consolidated financial statements, the date of the next hearing is
scheduled for 8 September 2025. If the final Supreme Court ruling is not in
favour of Ferrexpo Poltava Mining ("FPM"), the claimant may take steps to
appoint either a state or a private bailiff and request the commencement of
enforcement procedures, which could have a material negative impact on the
Group's business activities and its ability to continue as a going concern, as
the assets of FPM could be seized or subject to a forced sale. In connection
with the contested sureties claim, the counterparty filed an application for
bankruptcy of FPM and a hearing scheduled for 24 July 2025 in respect of that
application was postponed. A further hearing is yet to be scheduled. In the
event of a possible negative decision by the court of first instance, the
Group will appeal. In the meantime, it is currently not possible to assess the
potential impact of such bankruptcy proceedings and their timing, as these
depend on further court proceedings, which may extend over a considerable
period of time.
As announced on 4 February 2025, the Group's subsidiary FPM has received
information that a civil claim was filed seeking joint liability of FPM and
its General Director for damages amounting to UAH157 billion (approximately
US$3.8 billion as at 1 August 2025) in favour of the Ukrainian state. This
claim is related to an initial accusation of the illegal sale of waste
products, as disclosed in the Group 2023 Annual Report & Accounts, which
have evolved into accusations that FPM is illegally mining and selling subsoil
(minerals other than iron ore), which is said to have caused damage to the
environment. FPM rejects these allegations in their entirety on the basis that
there was no illegal extraction of the subsoil. Management is of the opinion
that these accusations and the claim are without merit and FPM has started the
vigorous defence of its position in the Ukrainian courts. Even if a court in
Ukraine would conclude that there was illegal mining and sale of subsoil, the
extent of this claim is in no way comprehensible, and it is the Group
management's position that no reliable estimate can be made as at the date of
approval of these interim condensed consolidated financial statements. As a
result, and due to the absence of significant developments since the approval
of the Group's 2024 annual financial statements, no provisions were recognised
as at 30 June 2025 in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets.
Following the personal sanctions imposed on Mr Zhevago by Ukrainian
authorities on 12 February 2025, local subsidiaries of the Group in Ukraine
have not been receiving VAT refunds since March 2025. Although no sanctions
have been imposed on any member of the Group, the personal sanctions on Mr
Zhevago have implications on the Group's operation and, as a consequence, on
its profitability and cash flow generation, which could have an impact on the
Group's ability to continue as a going concern. In connection with the
personal sanctions on Mr Zhevago, on 20 February 2025, the State Bureau of
Investigation (the "SBI") made a media announcement regarding a potential
claim to the High Anti-Corruption Court of Ukraine (the "HACC") to nationalise
49.5% of shares in FPM and certain of its assets.
In addition to the above cases, there is a risk of transfer of 49.5% of the
corporate rights in a subsidiary of the Group in Ukraine to the Ukrainian
Asset Recovery and Management Agency ("ARMA"); this is related to ongoing
proceedings against Mr Zhevago.
See Note 2 Summary of material accounting policies and Note 19 Commitments,
contingencies and legal disputes to these interim condensed consolidated
financial statements as well as the Principal Risks section for further
details.
Going concern
As at the date of the approval of these interim condensed consolidated
financial statements, both the war and legal actions against the Group in
Ukraine are ongoing and still pose a significant threat to the Group's mining,
processing and logistics operations in Ukraine. This threat results in
material uncertainties outside of the Group's control. In addition to the
war-related material uncertainty, the Group is also exposed to the risks
associated with operating in a challenging environment in Ukraine, which may
or may not be exacerbated by the war and/or the current circumstances facing
Mr Zhevago (see Ukraine country risk in the Update on Principal Risks
section). As a result, the Group is exposed to a number of risk areas that are
heightened compared to those expected in a stable economy, such as an
environment of political, fiscal and legal uncertainties, which represents
another material uncertainty as at the date of approval of these interim
condensed consolidated financial statements. As mentioned in the section
Contingent liabilities and legal disputes above, there are a number of legal
actions against the Group in Ukraine, which had to be assessed by the
management also in terms of the Group's ability to continue as a going concern
and required critical judgements.
Detailed information on the Group's ability to continue as a going concern and
material uncertainties are disclosed in Note 2 Summary of material accounting
policies to these interim condensed consolidated financial statements.
Nikolay Kladiev
Chief Financial Officer, Ferrexpo plc
Operational review
Health and safety
Despite the ongoing war in Ukraine, Ferrexpo continues to maintain a good
safety record, with zero fatalities since August 2020. The Group recorded a
6-month lost time injury frequency rate ("LTIFR") of 0.56, higher than the
average 0.54 for 2024 due to a lost-time injury in January when an employee
received a slight injury to his finger when holding a waste container.
Group and subsidiary six-month LTIFR
1H 2025 2H 2024 FY 2024 1H 2024
FPM 0.77 0.50 0.42 0.34
FYM 0 0.58 0.28 0
FBM 0 0 0 0
Ukraine 0.59 0.51 0.39 0.26
First-DDSG 0 1.94 2.90 3.87
Group 0.56 0.60 0.54 0.48
Otherwise, the Group has maintained a low incidence of safety incidents due to
multi-year projects implementing a strong safety culture at its operations,
including workforce engagement, safety training and regular monitoring of
leading and lagging safety indicators. During the period, an additional bomb
shelter was installed for administrative employees at FPM.
Pellet production and pellet quality
During the first six months of 2025, out of its four pelletiser lines, the
Group has operated two in the first quarter and one in the second quarter in
addition to a parallel concentrate line. The Group announced its production
for the first half of 2025 in its second quarter 2025 production report on 7
July 2025. Total commercial production for the period was 3,393,135 tonnes,
comprising concentrate production of 1,223,504 tonnes and pellet production of
2,169,631 tonnes, of which FDP accounted for 81,787 tonnes. The total
production for the first half of 2025 was 9% lower than the same period last
year, though 7% higher than the previous six months to the end of December
2024.
The Group has continued to focus on high-grade production, with 100% of
production in the period being with an iron ore content of 65% or above. The
Group demonstrated agility and flexibility however, as it continued to benefit
from strong demand for its high-grade low-alumina concentrates from customers
in China, representing over a third of its product mix during the first half.
Iron ore products production
tonnes Fe Grade 1H 2025 2H 2024 Change 1H 2024 Change
Direct Reduction Pellets ("FDP") 67% 81,787 327,075 (75.0)% 162,645 (49.7)%
Premium Pellets 65% 2,087,844 2,446,025 (14.6)% 3,134,796 (33.4)%
Total pellet production 2,169,631 2,773,100 (21.8)% 3,297,441 (34.2)%
Commercial concentrate 67% 1,223,504 389,473 +214.1% 429,865 184.6%
Total commercial production 3,393,135 3,162,543 +7.3% 3,727,306 (9.0)%
Marketing
With continued access to Ukrainian Black Sea ports during the first half of
2025, the Group was able to maintain exports to customers in Europe (in
addition to the established rail and barge routes) and further afield to its
customers in MENA and Asia.
The sales mix comprised of high-grade commercial concentrates and pellets,
with concentrates predominantly sold to customers in China and pellets to
customers in Europe and the Middle East.
Sales by region
Market regions 1H 2025 2H 2024 1H 2024
Europe, including Turkey 46% 46% 80%
MENA 4% 4% 2%
Asia 50% 50% 18%
Totals may not sum due to rounding
Responsible business activities
Safety
The Group is pleased to report that there were no fatalities at its operations
in 1H 2025. Regrettably, however, there was an increase in the number of minor
injuries reported during the period and consequently the reported injury rate
("LTIFR") increased to 0.56 which is above the five-year trailing average rate
at 0.54.
Community support
Since the early stages of Russia's invasion of Ukraine in 2022, the Group has
sought to utilise its position as a business in Ukraine to source and provide
support throughout the communities where the Group operates. In response to
the humanitarian crisis in Ukraine, the Group established the dedicated
Ferrexpo Humanitarian Fund, which combined with its regular CSR activities,
has operated over 100 programmes and initiatives. Regrettably, due to the
suspension of VAT refunds and the resulting lower financial liquidity of the
Group, only essential humanitarian efforts are being continued at the present
time.
Pathway to low carbon production
Since 2023 the Group has completed an external assurance process on its Scope
1 and Scope 2 emissions. For 2024 the Group also completed the process for
Scope 3 emission. This was done to build confidence around the reporting of
sustainability topics. In December 2024, the Group also published its second
Climate Change Report. The report represented the culmination of extensive
work conducted to map out the carbon footprint of Ferrexpo and its exposure to
climate change risks and opportunities, as we strive to deliver Net Zero
emissions production by 2050. Three potential war-ending scenarios were
analysed: continuation of war, war ending and rapid or slow adoption. The
modelling identified that under the first two scenarios absolute emissions
reductions exceeded SBTi requirements and our own targets, whereas the
scenario of slow adoption identified that Ferrexpo would fall short of SBTi
requirements but surpass our internal goals.
Greenhouse gas emissions
1H 2025 1H 2024 Change
Absolute emissions (tonnes CO(2)e)
Scope 1 (direct emissions, principally diesel and natural gas) 137 193 (29)%
Scope 2 (indirect emissions, reflecting electricity consumption) 145 111 +30%
Group total 281 304 (8)%
Unit emissions (kg CO(2)e per tonne of production)
Scope 1 39 54 (28)%
Scope 2 41 31 +31%
Group total 80 85 (7)%
The principal effects on emissions include:
· Clean power purchasing. Since May 2024, the Group has been mandated
to import up to 80% of its electricity, depending on domestic availability
from neighbouring EU countries. This power is typically generated from carbon
rich sources. Consequently, the Group's ability to locally source cleaner
hydro and nuclear generated power has been reduced. This is reflected in a
decreasing proportion of the Group's purchases of clean energy sources at 45%
in 1H 2025 (1H 2024: 63%).
· Mining activities. Ferrexpo continues to operate its mining
activities at a reduced capacity due to the war. The first quarter, however,
was the best quarter for production volumes since the start of the full-scale
invasion in February 2022. Operations have since downscaled in the second
quarter, resulting in an overall decrease in diesel consumption by 33%
compared to 1H 2024.
· Processing and beneficiation activities. With a decrease in pellet
production in 1H 2025, natural gas consumption at the Group's pelletising
facilities has fallen by 33% compared to 1H 2024.
The Group's Scope 3 emissions are dominated by the emissions generated by
steelmakers in the conversion of iron ore to steel, with this activity
representing 96% of Scope 3 emissions in 1H 2025 (1H 2024: 96%), and more than
90% of total emissions (Scopes 1, 2 and 3 combined). Ferrexpo's Scope 3
emissions footprint was 1.49 tonnes CO(2) per tonne of production in 1H 2025,
higher than 2024 due to a pivot toward increased pellet feed concentrate
production and sales, a product which requires additional processing in the
steelmaking process to produce steel, compared to pellets.
Responsible Business Report 2024
Later in the year, the Group will release its tenth annual Responsible
Business Report.
Update on principal risks
Principal Risks are assessed on the basis of impact and probability and are
considered to have the greatest potential effect on the business. Each
Principal Risk is linked to aspects of the Group's strategy that could be
affected if an event were to occur. The Group considers the Principal Risks
facing the business, including the ongoing war in Ukraine since the full-scale
invasion in February 2022, Ukraine country risk, counterparty risk, iron ore
market and pricing risk, operating risks including health and safety,
production, logistics and operating costs, information technology and
cybersecurity, and climate change.
The principal risks detailed on pages 84 to 94 of the 2024 Annual Report and
Accounts published in April 2025 remain relevant. An update on material
developments that relate to the Group's Principal Risks since their
publication in April 2025 is provided below.
In addition, the Board and management have identified three new principal
risks: major shareholder risk, liquidity risk and taxation risk which are also
included in the updated descriptions below.
Update since publication of Annual Report and Accounts in April 2025
Conflict risk and outlook
The primary consideration for Ferrexpo's risk profile at the present time is
Russia's full-scale invasion of Ukraine, and the impact that this is having,
and will continue to have, on Ferrexpo's business in Ukraine.
Since the Group published its Principal Risks in April 2025, Russian armed
forces have made small advances and occupied more territories in Ukraine.
Ukraine has also continued to suffer airborne attacks on civilians, energy and
transport infrastructure. Attacks on civilian infrastructure in particular,
have increased in frequency and intensity towards the end of the second half
of 2025 and into July.
Ferrexpo's operations continue to operate, albeit with greater significant
limitations on working hours due to air raid alerts and occasional disruption
to power transmission. Access to Ukraine's Black Sea ports has been maintained
and as long as the level of risk is acceptable, the Group will continue to use
this export route.
The war in Ukraine continues to represent a significant threat to Ferrexpo's
operations in Ukraine, should the war continue in its current configuration,
or even escalate further. The outlook for Ukraine at present remains
inherently unpredictable in the short to medium term, with a range of
military, financial and other factors all having a significant influence on
the outcome for the people of Ukraine and businesses deriving their revenues
from Ukraine. In the near term, it is expected that the conflict will continue
to put increasing strain on the economy of Ukraine, in particular, with regard
to elevated electricity prices and railway tariffs.
For further information, see the sections titled Sales and Marketing Review
and Financial Review in this report in addition to the Going Concern Statement
above.
Ukraine country risk
It is over three years since the full-scale invasion of Ukraine. Ferrexpo's
operations in the Poltava Region have not seen direct combat, however missile
and drone attacks in the region are frequent. The business has remained
relevant by adapting to the challenges it faces and continuing to produce and
export.
At a national level, the war is placing a strain on the economy. Tax revenues
have fallen while spending on the military has increased. Consequently, the
government has sought to increase revenues from business. Examples include
increasing railway tariffs and new laws on the repatriation of funds and
currency controls.
The war places unique challenges on the business. At the end of June 2025, a
total of 738 colleagues were serving in the Armed Forces of Ukraine, more than
at any time since the start of the full-scale invasion. Those in the workplace
are enduring psychological stress. The working day is frequently interrupted
by air raid alerts. Damage to energy infrastructure has forced the need to
import electricity at higher tariffs. Supply chain disruptions have limited
the variety of suppliers and increased costs for key consumables. Access to
logistics routes can be blocked or disrupted.
For more information, see the section titled "War Risk", as well as the
Principal Risks section of the 2024 Annual Report and Accounts pages 84 to 94.
The Group is currently subject to legal proceedings in Ukraine, many of which
relate to circumstances concerning Mr Zhevago and attempts by state agencies
to recover funds from a collapsed bank he was associated with. These legal
proceedings are ongoing in Ukrainian courts. The highest risk cases include:
litigation with the Deposit Guarantee Fund in relation to corporate rights of
three mining entities; a case brought by the Ministry of Justice to enforce
and auction corporate rights in three mining entities; a claim on FPM to
recover UAH4.7 billion (US$113 million) for contested sureties; litigation
regarding share freezes in all Ukrainian subsidiaries related to the
investigation in connection with Bank F&C and litigations on VAT refunds.
Some other cases include claims related to royalties, ecology, waste products,
transfer pricing disputes.
In February 2025, the State Bureau of Investigation in Ukraine ("SBI")
announced that a Ukrainian court granted a request of the Prosecutor General's
Office of Ukraine to transfer 49.5% of the corporate rights of Ferrexpo
Poltava Mining to Ukraine's Asset Recovery and Management Agency ("ARMA"). No
Ferrexpo Group company has received any official documentation or requests
from the Ukrainian authorities with regards to the decision of the Pecherskyi
District Court of Kyiv and management have not seen a copy of the court
decision. The SBI statement followed a separate press release made by the SBI
which said it was preparing to lodge a claim together with Ukraine's Ministry
of Justice to the High Anti-Corruption Court of Ukraine, requesting the
nationalisation of certain assets and corporate rights of FPM. It is the
Group's understanding that no claim has been lodged. The details of these
actions are therefore unclear at this stage and the Company is working with
its legal advisors to further understand the situation.
In March 2025, Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining received
notifications from the Ukrainian tax authorities of a decision to suspend the
refund of VAT for the month of January 2025. Notifications of the withholding
of further refunds up until and including April have also been received.
The actions and conduct of the Ukraine authorities in relation to these cases
constitute breaches of Ukraine's obligations under the UK-Ukraine BIT and the
Swiss-Ukraine BIT, including to accord Ferrexpo's investment fair and
equitable treatment and not to impair by unreasonable or discriminatory
measures the management, maintenance, use, enjoyment or disposal of Ferrexpo's
investment. In these circumstances, Ferrexpo Plc and Ferrexpo AG have been
left with no option but to send to the Government of Ukraine a formal written
notification of potential claims under the UK-Ukraine BIT and the
Swiss-Ukraine BIT. The purpose of this notification, sent in March 2025, was
to explain how Ukraine's actions constitute breaches of Ukraine's obligations
under the UK-Ukraine BIT and the Swiss-Ukraine BIT, to request that Ukraine
procure the lifting and/or cessation of the unlawful actions, and to request
the Government of Ukraine to enter into negotiations.
In May 2025, Ferrexpo received information that the Commercial Court of
Poltava Region accepted for consideration an application from 'LLC "Financial
Company" "Maxi Capital Group"' to open bankruptcy proceedings of FPM. Whilst
the court has accepted the Maxi Capital application, no hearing has yet been
heard in the court. Based on advice from Ukrainian legal counsel, during the
upcoming preparatory hearing the court should consider that there is currently
a dispute between Maxi Capital and FPM for contested sureties, no final
decision in relation to such dispute has been made by the Supreme Court and as
detailed below the Supreme Court has suspended the possible enforcement of
such claim.
Major shareholder risk (new)
The Company's largest shareholder is Fevamotinico S.a.r.l., which as at the
date of this report holds 49.3% of the voting rights in Ferrexpo plc.
Fevamotinico S.a.r.l. is indirectly wholly owned by The Minco Trust. The Minco
Trust is a discretionary trust that has three beneficiaries, consisting of
Kostiantyn Zhevago and two other members of his family. Many of the ongoing
legal proceedings involving Ferrexpo in the Ukrainian courts relate to Mr
Zhevago. For example, the Deposit Guarantee Fund proceedings in connection
with an alleged embezzlement of funds from Bank F&C, a Ukrainian bank
previously owned by Mr Zhevago which was declared insolvent in 2015. Bank
F&C has never been part of the Ferrexpo Group; however, the Deposit
Guarantee Fund is seeking to recover the allegedly embezzled funds through
Ferrexpo. Due to its association with Mr Zhevago, the Group may also
experience negative media attention, operating challenges and strained
relationships with its stakeholder groups. Consequently, the Risk Committee of
the Group deemed it appropriate to introduce this new principal risk to the
register.
Liquidity risk (new)
The Group's cash flow generation is affected by the volatility of iron ore
prices on global markets and input costs including electricity, gas, diesel,
grinding bodies, capital expenditures, some of which is outside of
management's control.
Historically, the Group has managed to control its liquidity throughout
various commodity cycles. Since the start of the war in Ukraine, however, the
challenges for the Group have increased, factors that are beyond the control
of management.
The Group is virtually debt free following the repayment of its large credit
facility in June 2021. However, due to the situation in Ukraine and certain
circumstances relating to Mr Zhevago, one of the Group's shareholders, the
debt capital market is currently closed to the Group, making it critical that
the Group has sufficient cash resources to ensure that its liabilities can be
settled as they fall due.
Following the personal sanctions imposed on Mr Zhevago in February 2025 by the
Ukrainian government, the Ukrainian tax authorities have formally suspended
VAT refunds for January to April 2025, resulting in additional challenges to
the Group. As a result of the suspended VAT refunds, the Group downscaled its
operations resulting in an adjustment of the production plan to mitigate
working capital outflows from the missing VAT refunds and to preserve cash.
In the second quarter of 2025, the Group reviewed and reduced its operating
and capital expenditure as far as possible to maintain an appropriate cash
balance. The cash balances assumed in the Group's long-term model for the next
12 to 18 months are also relevant to the Group's going concern assessment,
which is subject to material uncertainties as certain matters are outside the
Group's control, including potential cash outflows from ongoing legal cases in
Ukraine.
See also Note 2 Summary of material accounting policies and Note 19
Commitments, contingencies and legal disputes to these condensed interim
consolidated financial statements for further information.
Taxation (new)
The Group pays corporate profit tax in a number of jurisdictions, including
Ukraine, Switzerland, the United Kingdom and the U.A.E. (Dubai), and its
effective tax rate is subject to various factors outside of the Group's
control. This includes the volatility in the global iron ore market and
foreign exchange rates, primarily between the Ukrainian hryvnia and the US
dollar.
The Group operates across a number of jurisdictions through its value chain
and prices its sales between its subsidiaries using international benchmark
prices for comparable products covering product quality and applicable freight
costs.
Following the completion of two transfer pricing audits in Ukraine, the
Group's two major subsidiaries received claims of UAH2,162 million (US$52
million as at 30 June 2025), including fines and penalties, and UAH259 million
(US$6 million as at 30 June 2025), without potential fines and penalties,
respectively. Despite the two significant claims received, the Group is still
of the opinion that the terms of the cross-border transactions between the
subsidiaries of the Group comply with the legislation applicable in the
jurisdictions in which it operates.
In addition to the above-mentioned transfer pricing claims, a subsidiary of
the Group in Ukraine received a claim in the amount of UAH1,233 million (US$30
million as at 30 June 2025) in relation to allegedly underpaid royalties.
The claims received are currently being heard by the courts in Ukraine and no
decision has been made by a court instance that would make the claims a legal
obligation. The Group will continue to defend its methodology applied to
determine the prices between its subsidiaries and to compute royalties paid in
the Ukrainian courts, but there is a risk that the independence of the
judicial system and its immunity from economic and political influences in
Ukraine is not upheld.
Any potential cash outflows in relation to these claims received would have a
significant effect on the Group's available cash balance and its ability to
continue as a going concern. See also Note 2 Summary of material accounting
policies and Note 19 Commitments, contingencies and legal disputes to these
condensed interim consolidated financial statements for further information.
Directors' responsibility statement
The Interim Report complies with the Disclosure Guidance and Transparency
Rules ("DTR") of the United Kingdom's Financial Conduct Authority in respect
of the requirement to produce a half-yearly financial report. The preparation
of the Interim Report for the six months ended 30 June 2025 in accordance with
applicable laws, regulations and accounting standards is the responsibility
of, and has been approved by, the Directors.
We confirm that to the best of our knowledge:
· the condensed set of consolidated financial statements has been
prepared in accordance with IAS 34 as contained in UK adopted IFRS;
· the Interim Management Report includes a fair review of the
important events that have occurred during the first six months of the
financial year and their impact on the condensed financial statements, and
description of the principal risks and uncertainties for the remaining six
months of the financial year, as required by DTR4.2.7R; and
· the Interim Management Report includes a fair review of
disclosures of material related party transactions that have occurred in the
first six months of the financial year and of material changes in the related
party transactions described in the 2024 Annual Report and Accounts, as
required by DTR4.2.8R.
The Directors are also responsible for the maintenance and integrity of the
Ferrexpo plc website. A list of current Directors is maintained on the
Ferrexpo plc website, which can be found at www.ferrexpo.com
(http://www.ferrexpo.com/) . Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
For and on behalf of the Board
Lucio Genovese Nikolay Kladiev
Interim Executive Chair Chief Financial Officer and Executive Director
Independent Review Report to Ferrexpo plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six-months ended 30
June 2025 which comprises the Interim Consolidated Income Statement, the
Interim Consolidated Statement of Comprehensive Income, the Interim
Consolidated Statement of Financial Position, the Interim Consolidated
Statement of Cash Flows, the Interim Consolidated Statement of Changes in
Equity and the related explanatory Notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with International Accounting Standard
('IAS') 34 "Interim Financial Reporting", as adopted for use in the United
Kingdom and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued for use in the United Kingdom. A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in Note 2, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards
adopted for use in the United Kingdom ("UK adopted IFRS"). The condensed set
of financial statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard ('IAS') 34
"Interim Financial Reporting", as adopted for use in the United Kingdom.
Material Uncertainty Relating to Going Concern
We draw your attention to Note 2, which indicates that the ongoing war in
Ukraine poses a threat to the Group's mining, processing and logistics
operations within Ukraine and may cast significant doubt on the ability of the
Group to continue as a going concern. As stated in Note 2, management has
assessed that the duration and severity of the impact of the war in Ukraine on
the Group's activities are difficult to predict and indicate that a material
uncertainty exists as some of the uncertainties identified are outside of the
Group management's control.
In addition, a further material uncertainty exists, as disclosed in Note 2,
relating to a number of legal disputes in Ukraine due to the application of
local legislation and the outcomes of proceedings involving the Group. In
particular, the decision by the Ukraine Court of Appeal to uphold the award in
favour of the claimant in the contested sureties claim, and the potential
enforcement of this decision, may place significant demands on the Group's
future cash resources.
Additionally, as disclosed in Note 2, on 12 February 2025, personal sanctions
were imposed by the Ukrainian authorities on Mr Kostyantin Zhevago, one of
three owners of The Minco Trust, which fully owns Fevamotinico, the largest
shareholder of the Group. Although no sanctions have been imposed directly on
any Group entities, these personal sanctions have indirect consequences for
the Group, such as heightened challenges in relation to tax matters, including
the refusal to issue VAT refunds, and the potential nationalisation of 49.5%
of the shares of FPM and certain of its assets which may further impact the
Group's ability to continue as a going concern.
Our opinion is not modified in respect of these matters.
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE 2410, however future events or conditions may cause the entity to cease
to continue as a going concern.
Emphasis of Matters
We draw your attention to Note 19 relating to Commitments, contingencies and
legal disputes which describes the uncertainty in the application of local
legislation in Ukraine in respect of the outcome of the proceedings in which
the Group is involved.
We also draw your attention to Note 10 relating to Property, plant and
equipment and Note 19 relating to Commitments, contingencies and legal
disputes, which describes the uncertainty related to the estimate of the
recoverable amount of the Group's Cash Generating Unit as a result of the
ongoing war and ongoing legal proceedings in Ukraine.
Our conclusion is not modified in respect of either of these two matters.
Responsibilities of Directors
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the Group's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our
conclusion relating to the material uncertainties relating to going concern,
is based on procedures that are less extensive than audit procedures, as
described in the Basis for Conclusion paragraph of this report.
Use of our Report
This report is made solely to the Company in accordance with guidance
contained in ISRE (UK) 2410 "Review of Interim Financial Information Performed
by the Independent Auditor of the Entity" issued by the Financial Reporting
Council. Our review work has been undertaken so that we might state to the
company those matters we are required to state to them in an independent
review report and for no other purposes. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we have formed.
MHA, Auditor
London, United Kingdom
5 August 2025
MHA is the trading name of MHA Audit Services LLP, a limited liability
partnership in England and Wales (registered number OC455542)
Interim Consolidated Income Statement
US$000 Notes 6 months ended 30.06.25 6 months ended 30.06.24 Year-ended
(unaudited) (unaudited) 31.12.24
(audited)
Revenue 3/4 452,607 548,535 933,263
Operating expenses 5 (641,339) (508,418) (1,004,445)
Other operating income 1,880 3,471 5,475
Operating foreign exchange (losses)/gains 6 (7,292) 55,258 83,321
Operating (loss)/profit (194,144) 98,846 17,614
Share of profit from associates 647 1,809 2,314
(Loss)/profit before tax and finance (193,497) 100,655 19,928
Net finance expense 7 (1,096) (8) (993)
Non-operating foreign exchange gains/(losses) 6 7,694 (24,976) (39,355)
(Loss)/profit before tax (186,899) 75,671 (20,420)
Income tax expense 8 (9,105) (20,181) (29,610)
(Loss)/profit for the period/year (196,004) 55,490 (50,030)
(Loss)/profit attributable to:
Equity shareholders of Ferrexpo plc (196,000) 55,471 (50,046)
Non-controlling interests (4) 19 16
(Loss)/profit for the period/year (196,004) 55,490 (50,030)
(Loss)/earnings per share:
Basic (US cents) 9 (33.31) 9.43 (8.51)
Diluted (US cents) 9 (33.31) 9.26 (8.51)
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
Interim Consolidated Statement of Comprehensive Income
US$000 Notes 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
(Loss)/profit for the period/year (196,004) 55,490 (50,030)
Items that may subsequently be reclassified to profit or loss:
Exchange differences on translating foreign operations 6 12,138 (91,155) (136,926)
Income tax effect (371) 3,369 3,972
Net other comprehensive income/(loss) that may be reclassified to profit or 11,767 (87,786) (132,954)
loss in subsequent periods
Items that will not be reclassified subsequently to profit or loss:
Remeasurement gains/(losses) on defined benefit pension liability 62 66 (7,040)
Net other comprehensive income/(loss) not being reclassified to profit or loss 62 66 (7,040)
in subsequent periods
Other comprehensive income/(loss) for the period/year, net of tax 11,829 (87,720) (139,994)
Total comprehensive loss for the period/year, net of tax (184,175) (32,230) (190,024)
Total comprehensive loss attributable to:
Equity shareholders of Ferrexpo plc (184,176) (32,227) (190,016)
Non-controlling interests 1 (3) (8)
(184,175) (32,230) (190,024)
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
Interim Consolidated Statement of Financial Position
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Assets
Property, plant and equipment 10 575,668 723,918 797,456
Right-of-use assets 11 2,655 5,029 3,497
Intangible assets 12 5,364 5,568 5,827
Investments in associates 7,059 6,350 6,077
Inventories 14 5,234 5,185 5,512
Other non-current assets 32,308 32,456 36,966
Other taxes recoverable and prepaid 13 33,447 − −
Deferred tax assets 8 1,274 2,258 9,247
Total non-current assets 663,009 780,764 864,582
Inventories 14 151,099 192,508 194,490
Trade and other receivables 63,572 39,792 74,536
Prepayments and other current assets 15 17,295 24,648 26,924
Income taxes recoverable and prepaid 8 7,783 7,026 65
Other taxes recoverable and prepaid 13 27,672 36,296 44,409
Cash and cash equivalents 3/16 52,262 105,919 115,131
Total current assets 319,683 406,189 455,555
Total assets 982,692 1,186,953 1,320,137
Equity and liabilities
Issued capital 20 121,628 121,628 121,628
Share premium 185,112 185,112 185,112
Other reserves 20 (2,796,868) (2,808,904) (2,763,945)
Retained earnings 3,229,808 3,425,751 3,538,375
Equity attributable to equity shareholders of Ferrexpo plc 739,680 923,587 1,081,170
Non-controlling interest 74 73 78
Total equity 739,754 923,660 1,081,248
Lease liabilities 3/17 241 419 528
Defined benefit pension liability 24,150 22,806 15,974
Provision for site restoration 3,375 3,118 2,830
Deferred tax liabilities 8 6,299 4,346 3,333
Total non-current liabilities 34,065 30,689 22,665
Lease liabilities 3/17 2,476 4,665 3,092
Trade and other payables 41,559 55,781 46,705
Provisions 19 116,800 115,694 119,979
Accrued and contract liabilities 20,843 29,415 16,691
Income taxes payable 8 17,978 13,561 16,239
Other taxes payable 9,217 13,488 13,518
Total current liabilities 208,873 232,604 216,224
Total liabilities 242,938 263,293 238,889
Total equity and liabilities 982,692 1,186,953 1,320,137
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
The financial statements were approved by the Board of Directors and
authorised for issue on 5 August 2025 and signed on behalf of the Board.
Lucio
Genovese
Nikolay Kladiev
Executive
Chair
Chief Financial Officer and Executive Director
Interim Consolidated Statement of Cash Flows
US$000 Notes 6 months ended 6 months ended Year ended
31.12.24
30.06.25 30.06.24
(unaudited) (unaudited) (audited)
(Loss)/profit before tax (186,899) 75,671 (20,420)
Adjustments for:
Depreciation of property, plant and equipment, right-of-use assets and 5 35,586 33,606 60,281
amortisation of intangible assets
Net finance income 7 (597) (1,242) (1,440)
(Gains)/losses on disposal and liquidation of property, plant and equipment 5 (74) 45 231
Write-offs/(backs) and impairments 5 154,309 (118) 71,871
Share of profit from associates (647) (1,809) (2,314)
Movement in allowance for doubtful receivables 992 3,978 (1,731)
Movement in site restoration provision 226 229 611
Employee benefits 2,192 1,707 3,381
Share-based payments 274 114 320
Operating foreign exchange losses/(gains) 6 7,292 (55,258) (83,321)
Non-operating foreign exchange (gains)/losses 6 (7,694) 24,976 39,355
Operating cash flow before working capital changes 4,960 81,899 66,824
Changes in working capital:
(Increase)/decrease in trade and other receivables (17,359) (3,381) 36,136
Decrease/(increase) in inventories 44,411 (4,327) (10,856)
(Decrease)/increase in trade and other payables (incl. accrued and contract (20,856) 14,003 36,922
liabilities)
Increase in other taxes recoverable and payable (incl. VAT) (30,600) (18,054) (10,658)
Cash (used in)/generated from operating activities (19,444) 70,140 118,368
Interest paid (161) (8) (815)
Income tax paid (3,020) (13,406) (23,278)
Post-employment benefits paid (1,278) (1,202) (2,373)
Net cash flows (used in)/from operating activities (23,903) 55,524 91,902
Cash flows used in investing activities
Purchase of property, plant and equipment and intangible assets (28,451) (55,371) (101,688)
Proceeds from disposal of property, plant and equipment and intangible assets 128 32 70
Interest received 1,134 1,904 3,960
Dividends from associates 123 − 131
Net cash flows used in investing activities (27,066) (53,435) (97,527)
Cash flows used in financing activities
Principal elements of lease payments 17 (2,493) (2,846) (5,616)
Dividends paid to equity shareholders of Ferrexpo plc 9 (5) (44) (46)
Net cash flows used in financing activities (2,498) (2,890) (5,662)
Net decrease in cash and cash equivalents (53,467) (801) (11,287)
Cash and cash equivalents at the beginning of the period/year 105,919 115,241 115,241
Currency translation differences (190) 691 1,965
Cash and cash equivalents at the end of the period/year 16 52,262 115,131 105,919
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
Interim Consolidated Statement of Changes in Equity
For the financial year 2024 and the six months ended Attributable to equity shareholders
30 June 2025 of Ferrexpo plc
US$000 Issued Share premium Other reserves Retained Total capital and reserves Non-controlling interests Total
capital (Note 20) Earnings equity
At 31 December 2023 (audited) 121,628 185,112 (2,676,294) 3,482,883 1,113,329 81 1,113,410
Loss for the year − − − (50,046) (50,046) 16 (50,030)
Other comprehensive loss − − (132,930) (7,040) (139,970) (24) (139,994)
Total comprehensive loss for the year − − (132,930) (57,086) (190,016) (8) (190,024)
Equity dividends to shareholders of Ferrexpo plc − − − (46) (46) − (46)
(Note 9)
Share-based payments − − 320 − 320 − 320
At 31 December 2024 (audited) 121,628 185,112 (2,808,904) 3,425,751 923,587 73 923,660
Loss for the period − − − (196,000) (196,000) (4) (196,004)
Other comprehensive income − − 11,762 62 11,824 5 11,829
Total comprehensive loss for the period − − 11,762 (195,938) (184,176) 1 (184,175)
Equity dividends paid to shareholders of Ferrexpo plc (Note 9) − − − (5) (5) − (5)
Share-based payments − − 274 − 274 − 274
At 30 June 2025 (unaudited) 121,628 185,112 (2,796,868) 3,229,808 739,680 74 739,754
For the six months ended 30 June 2024 Attributable to equity shareholders
of Ferrexpo plc
US$000 Issued Share Other reserves (Note 20) Retained earnings Total capital and reserves Non-controlling interests Total
capital premium equity
At 31 December 2023 (audited) 121,628 185,112 (2,676,294) 3,482,883 1,113,329 81 1,113,410
Profit for the period − − − 55,471 55,471 19 55,490
Other comprehensive loss − − (87,764) 66 (87,698) (22) (87,720)
Total comprehensive loss for the period − − (87,764) 55,537 (32,227) (3) (32,230)
Equity dividends paid to shareholders of Ferrexpo plc (Note 9) − − − (45) (45) − (45)
Share-based payments − − 113 − 113 − 113
At 30 June 2024 (unaudited) 121,628 185,112 (2,763,945) 3,538,375 1,081,170 78 1,081,248
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
Although accounts are published in US dollars and dividends are declared in US
dollars, the shares are denominated in UK pounds sterling and dividends are
therefore paid in UK pounds sterling. See Note 9 Earnings per share and
dividends paid and proposed for dividends paid for further information.
Notes to the Interim Condensed consolidated financial statements
Note 1: Corporate information
Organisation and operation
Ferrexpo plc (the "Company") is incorporated and registered in England and
Wales, of which England is considered to be the country of domicile, with its
registered office at 55 St James's Street, London SW1A 1LA, UK. The Company is
listed on the London Stock Exchange and it is a member of the FTSE All-share
ranking. Ferrexpo plc and its subsidiaries (the "Group") operate two mines and
a processing plant near Kremenchuk in Ukraine, have an interest in a port in
Odessa and sales and marketing activities around the world, including offices
in Switzerland, the U.A.E. (Dubai), Japan, China, Singapore and Ukraine. The
Group also owns logistics assets in Austria, which operate a fleet of vessels
operating on the Rhine and Danube waterways and an ocean-going vessel, which
provides top-off services. The Group's operations are vertically integrated
from iron ore mining through to iron ore concentrate and pellet production and
subsequent logistics. The Group's mineral properties lie within the Kremenchuk
Magnetic Anomaly and are currently being extracted at the
Gorishne-Plavninske-Lavrykivske ("GPL") and Yerystivske deposits.
Despite the ongoing war in Ukraine, the Group has managed to continue its
operations in the first half of the financial year 2025. The business
environment in Ukraine remains difficult and challenging. This is not just
because of the ongoing war, but also because of several ongoing legal disputes
in the country. As disclosed in Note 35 Events after the reporting period
included in the Group's 2024 Annual Report & Accounts, personal sanctions
have been imposed on Kostyantin Zhevago ("Mr Zhevago") by the State of
Ukraine.These sanctions, which have been treated as a non-adjusting post
balance sheet event as at 31 December 2024, are personal in nature and have
not been imposed on any member of the Ferrexpo Group. However, as a result of
these sanctions against Mr Zhevago, the tax authorities in Ukraine refused to
make VAT refunds to the Group's subsidiaries in Ukraine. As a consequence, the
Group had to adjust its production plan to minimise the impact of the rejected
VAT refunds on the Group's liquidity, which also affected the possible sales
to the Group's international customers and its cash flow generation. The lower
cash flow generation did not only have an impact on the Group's available
liquidity, but also on the carrying value of the Group's non-current operating
assets, resulting in an impairment loss of US$154,323 thousand as at 30 June
2025. As at the date of the approval of these interim condensed consolidated
financial statements, the war is still ongoing and continues to pose a
significant threat to the Group's mining, processing and logistics operations
within Ukraine. In addition to the war-related material uncertainty, another
material uncertainty is related to the several ongoing legal actions against
the Group in Ukraine, including the suspension of VAT refunds, which may be
exacerbated by the fact that the Group is operating in a dynamic and adverse
political landscape in Ukraine.
See Note 2 Summary of material accounting policies, Note 10 Property, plant
and equipment and Note 19 Commitments, contingencies and legal disputes for
further information.
The largest shareholder of the Group is Fevamotinico S.a.r.l.
("Fevamotinico"), a company incorporated in Luxembourg. Fevamotinico is
ultimately wholly owned by The Minco Trust, of which Kostyantin Zhevago ("Mr
Zhevago") and two other members of his family are the beneficiaries. At the
time this report was published, Fevamotinico held 49.3% (31 December 2024:
49.3%; 30 June 2024: 49.3%) of Ferrexpo plc's issued voting share capital
(excluding treasury shares).
The Group's interests in its subsidiaries are held indirectly by the Company,
with the exception of Ferrexpo AG, which is directly held. The Group's
consolidated subsidiaries are disclosed in the Additional Disclosures of the
2024 Annual Report & Accounts.
At 30 June 2025, the Group also holds through PJSC Ferrexpo Poltava Mining an
interest of 49.9% (31 December 2024: 49.9%; 30 June 2024: 49.9%) in TIS Ruda
LLC, a Ukrainian port located on the Black Sea, which is accounted for as an
associate, using the equity method of accounting.
Note 2: Summary of material accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the six-month
period ended 30 June 2025 have been prepared in accordance with International
Accounting Standard ('IAS') 34 Interim Financial Reporting, as adopted for use
in the United Kingdom. The interim condensed consolidated financial statements
do not include all of the information and disclosures required in the annual
financial statements and should be read in conjunction with the Group's annual
financial statements for the year ended 31 December 2024.
The interim condensed consolidated financial statements do not constitute
statutory accounts as defined in section 435 of the Companies Act 2006. The
financial information for the full year is based on the statutory accounts for
the financial year ended 31 December 2024. A copy of the statutory accounts
for that year, which were prepared in accordance with International Financial
Reporting Standards adopted for use in the United Kingdom ("UK adopted IFRS")
and with the Companies Act 2006, as applicable to companies reporting under
international accounting standards, has been delivered to the Registrar of
Companies. The auditor's report under section 495 of the Companies Act 2006 in
relation to those accounts (i) was unqualified, (ii) did not contain a
statement under section S498(2) or S498(3) of the Companies Act 2006, but
(iii) included a separate section with regard to material uncertainties
related to going concern as a result of the ongoing war and the application of
local legislation in Ukraine in respect of the outcome of the proceedings in
which the Group is involved. The audit report also drew attention to the
uncertainty in the application of local legislation in Ukraine in respect of
the outcome of the proceedings in which the Group is involved and to the
uncertainty related to the estimate of the recoverable amount of certain
assets of the Group as result of the ongoing war and ongoing legal proceedings
in Ukraine.
These interim condensed consolidated financial statements have been reviewed,
not audited.
Going concern
Despite the unpredictable situation in Ukraine due to the ongoing war and
legal actions against the Group, the Group showed strong momentum at the
beginning of the year, resulting in the Group's best quarterly production in
the first quarter since the full-scale invasion in February 2022. This strong
momentum was significantly curtailed in the second quarter as the Group
started to experience the full impact of the Ukrainian tax authorities'
decisions to suspend the refund of VAT to the Group's subsidiaries in Ukraine.
As at the date of the approval of these interim condensed consolidated
financial statements, both the war and the legal actions against the Group in
Ukraine are still ongoing, which have affected the Group's business activities
and thus its profitability and cash flow generation during the six-month
period ended 30 June 2025 and are also expected to have an impact on the next
18 months since the approval of these interim condensed consolidated financial
statements, which relate to the period covered by the Group's going concern
assessment.
The challenging and unpredictable environment in which the Group has been
operating since the beginning of the invasion and the ongoing war, whose
duration and impact on the Group's activities in future periods are difficult
to predict, continues to represent a material uncertainty that may cast
significant doubt on the Group's ability to continue as a going concern. In
addition to the war-related material uncertainty, the Group is also exposed to
the risks associated with operating in a dynamic and adverse political
landscape in Ukraine, which may or may not be exacerbated by the war and/or
the current circumstances facing Mr Zhevago. As a result, the Group is exposed
to a number of risk areas that are heightened compared to those expected in a
stable economy, such as an environment of political, fiscal and legal
uncertainties, which represents another material uncertainty as at the date of
the approval of these interim condensed consolidated financial statements.
Following the personal sanctions imposed on Mr Zhevago by Ukrainian
authorities on 12 February 2025, the Group's subsidiaries in Ukraine have not
been receiving VAT refunds since March 2025. As a result of the suspension of
VAT refunds in Ukraine, the Group adjusted its production plan to mitigate
working capital outflows and preserve cash, affecting also the Group's cash
flow generation during the period covered by the Group's going concern
assessment. The financial long-term model was updated in June 2025 using
management's best estimate of reasonably conservative key assumptions, taking
also into account the current circumstances the Group has to operate in,
including the effects from the suspension of VAT refunds in Ukraine. The level
of the Group's production is currently restricted due to outstanding VAT
refunds and also remains dependent on a constant power supply and the
logistics network available to the Group as well as other potential adverse
effects on the Group's operation due to the ongoing war.
As a result of the challenging situation during the six-month period ended 30
June 2025, the Group's total commercial production totalled 3,393 thousand
tonnes of iron ore pellets and concentrate, a decrease of 9% compared to 3,727
thousand tonnes during the six-month period ended 30 June 2024. As a result of
the outstanding VAT refunds since March 2025, the Group significantly reduced
its capital expenditure programme, which however could only partially offset
the significantly lower operating cash flow generation. As a result, the
closing balance of cash and cash equivalents decreased to US$52,262 thousand
as at 30 June 2025, compared to US$105,919 thousand as of 31 December 2024.
As at the date of the approval of these interim condensed consolidated
financial statements, the Group is in a net cash position of approximately
US$66,330 thousand with an available cash balance of approximately US$68,639
thousand. In addition to the available cash balance, the Group has an
outstanding trade receivable balance of approximately US$9,714 thousand from
its pellet and concentrate sales, which is expected to be collected in the
next few months, and finished goods already stockpiled of 201 thousand tonnes
at different ports or storage locations other than the plant.
As disclosed in Note 30 Commitments, contingencies and legal disputes included
in the Group's 2024 Annual Report & Accounts, the ongoing war in Ukraine
and other circumstances facing the Group have led to an escalation of a number
of risks, including risks relating to the political environment and the
independence of the legal system in Ukraine, which remain at the date of the
approval of these interim condensed consolidated financial statements and
could have a material negative impact on the Group's business activities and
reputation.
The court proceedings before the Supreme Court of Ukraine in respect of
contested sureties (see Note 19 Commitments, contingencies and legal disputes
for further details) continued throughout the first half of the financial year
2025. Although management is of the opinion that this claim is without merit,
the full provision in the amount of UAH4,727 million (US$113,518 thousand as
at 30 June 2025), which was recorded as at the end of 2023, was not released,
considering the magnitude of this specific claim and the risks associated with
the judicial system in Ukraine. The outcome of this ongoing legal dispute
continues to represent a material uncertainty in terms of the Group's ability
to continue as a going concern. A future cash outflow, which also depends on
the details and technicalities of a possible enforcement in the event of a
negative decision by the Supreme Court, is likely to have a significant impact
on the Group's future cash flow generation and available liquidity.
In addition to this claim and as announced on 4 February 2025, the Group's
subsidiary Ferrexpo Poltava Mining ("FPM") has received a civil claim seeking
joint liability of FPM and its General Director for damages amounting to
UAH157 billion (approximately US$3.8 billion as at 30 June 2025) in favour of
the Ukrainian state (see Note 19 Commitments, contingencies and legal disputes
for further details). This claim is related to an initial accusation of the
illegal sale of waste products, which have transformed into accusations that
FPM is illegally mining and selling subsoil (minerals other than iron ore),
which is said to have caused damage to the environment. FPM rejects these
allegations in their entirety on the basis that there was no illegal
extraction of the subsoil. FPM mines and extracts iron ore according to its
mining licence and provides for the removal of rock and its storage as a waste
in addition to the extraction of iron ore. The management is of the opinion
that these accusations and the claim are without merit and FPM has started the
vigorous defence of its position in the Ukrainian courts.
As mentioned above, the Ukrainian subsidiaries of the Group have not been
receiving VAT refunds since March 2025. Although, the sanctions imposed on Mr
Zhevago have not been imposed on any member of the Group, the personal
sanctions on Mr Zhevago have implications for the Group's operation and, as a
consequence, on its profitability and cash flow generation, which could have
an impact on the Group's ability to continue as a going concern. The absence
of the VAT refunds and the impact on cash flow generation was, together with
possible mitigating actions, reflected in the Group's long-term model used for
the going concern assessment. In connection with the personal sanctions on Mr
Zhevago, on 20 February 2025, the State Bureau of Investigation (the "SBI")
made a media announcement regarding a potential claim to the High
Anti-Corruption Court of Ukraine (the "HACC") to nationalise 49.5% of shares
in FPM and certain of its assets. As at the date of approval of these interim
condensed consolidated financial statements, FPM has not received a formal
notification of such a claim. Further to that, under Ukrainian laws, the SBI
has no authority to petition, bring claims or make proposals (both on
nationalisation or application of any asset-confiscation sanction) to the HACC
and the proper authority should be the Ministry of Justice of Ukraine.
Nonetheless, in the event of a nationalisation of 49.5% of shares in FPM and
certain of its assets, it is likely this would have a significant impact on
the Group's ability to continue as a going concern as FPM could lose key
assets required for the production of iron ore pellets and concentrate. In
addition, a nationalisation of 49.5% of shares in FPM would have an impact on
the equity attributable to the shareholders of Ferrexpo plc and its future
distributable reserves because Ferrexpo AG ("FAG") would not be entitled to
dividends in relation to the nationalised 49.5% of shares in FPM. See Note 9
Earnings per share and dividends paid and proposed for further details.
On 4 March 2025, the SBI also made a media statement that the Pecherskyi
District Court of Kyiv has granted a request of the Prosecutor General's
Office of Ukraine to transfer 49.5% of the corporate rights in FPM held by FAG
to Ukraine's Asset Recovery and Management Agency ("ARMA"). This transfer is
in connection with ongoing proceedings against Mr Zhevago relating to Bank
F&C, as disclosed in detail on pages 45 and 46 of Note 19 Commitments,
contingencies and legal disputes. Under the Ukrainian Criminal Procedure Code,
the ARMA can accept into its management a piece of property that has been
arrested only to preserve real evidence. Corporate rights in a Ukrainian
company do not constitute real evidence as they are not treated as material
objects. Therefore, based on independent legal advice from Ukrainian counsel,
management understands the transfer of these corporate rights into the ARMA's
management is illegal. As at the date of the approval of these interim
condensed consolidated financial statements, the Group has not been provided
with a copy of the relevant court decision of the Pecherskyi District Court of
Kyiv and therefore the precise details of the court decision are not known to
the Group. However, based on independent legal advice from Ukrainian counsel,
management understands that FAG remains the 100% owner of FPM and management
does not expect that the transfer of 49.5% of the corporate rights in FPM to
ARMA will affect FPM's operations or the Group's ability to continue as a
going concern. Asset management is carried out on the basis of a management
agreement concluded between ARMA and a selected manager. Based on article 21
of the Law on ARMA, where the asset concerned is shares, the manager is
obliged to coordinate with the owner of owner of those shares regarding the
exercise of their management powers in respect of voting at any shareholders
meeting with the owner of the shares. This rule means that any manager
appointed by ARMA would not be able to vote at any shareholders meeting on its
own, but only with the consent of the owner, Ferrexpo AG. However, a transfer
of 49.5% of the corporate rights in FPM to ARMA for management of these
corporate rights would have an impact on the equity attributable to the
shareholders of Ferrexpo plc and its future distributable reserves. See Note 9
Earnings per share and dividends paid and proposed for further details.
As part of management's going concern assessment, the Group continuously
adjusts its financial long-term model to reflect the latest developments in
terms of possible production and sales volumes as well as latest market prices
and production costs, which are still adversely affected by production volumes
lower than those before the war commenced. The Group's long-term model does
also consider the effects from the suspension of VAT refunds in Ukraine,
caused by personal sanctions imposed on Mr Zhevago on 12 February 2025, which
required the downscaling of the Group's operation to minimise the impact on
the Group's liquidity.
The updated base case of the financial long-term model shows that the Group
has reasonably sufficient liquidity to continue its operations at a reduced
level throughout the entire period of the management's going concern
assessment, covering a period of 18 months from the date of approval of these
interim condensed consolidated financial statements. However, the Group's
available cash balance for the period 18 months after the approval of these
interim condensed consolidated financial statements also depends on the time
at which the VAT refund is resumed. The updated base case assumes a pellet
production volume of approximately 55% and 47% of the pre-war level for the
financial years 2025 and 2026, respectively, and an expected recovery to
almost the pre-war levels in 2028.
The update of the long-term model resulted in a delay of the expected ramp-up
of production to pre-war level by another one year. The reduction of the
production plan affects the Group's possible sales and therefore results in a
significantly lower cash flow generation, affecting also the available cash
balances throughout the period of the going concern assessment. In addition,
the production and sales volumes are also dependent on a constant power
supply, the logistics network available to the Group and other potential
negative effects on the Group's business activities as a result of the ongoing
war.
The Group's cash flow generation is most sensitive to price changes. The
sensitivities prepared for reasonably possible adverse changes, with a focus
on the expected realised prices, show negative available liquidity balances
under some scenarios in the first quarter of 2026, before any mitigating
actions are taken, such as a further reduction of operating expenditures and
the Group's mining activities. With the significant reduction of the Group's
operation in the updated long-term model, the available mitigating actions
also reduced significantly. The mitigating actions under the control of
management are estimated to be approximately US$18,000 thousand until 31
December 2026 and are considered to be sufficient to offset negative effects
from reasonably possible adverse changes to the base case. There are further
potential mitigating actions, which are however not fully under the control of
management, which are being further explored. A prolonged absence of VAT
refunds would have an adverse effect on the cash balances assumed in the
current long-term model, for which the Group's management identified risk
mitigating actions to partially offset this impact. Considering the tight
available cash balances under the base case scenario and sensitivity to
realised prices, the available cash balance is expected to be depleted by late
2025, when combining all effects from reasonable adverse changes (stress
test). However, it is management's position that, as in the past, a
combination of all reasonably possible or plausible adverse changes in respect
of realised prices and production costs is unlikely to happen in combination
as a result of the historical natural hedge between iron ore prices and prices
for key input materials.
The claims and certain decisions received by the courts in Ukraine are another
example of the risk of operating in a dynamic and adverse political landscape
in Ukraine, which creates additional challenges for both the Group's
subsidiaries in Ukraine and, also for the Group itself.
The Group has assessed that, taking into account:
· its available cash and cash equivalents;
· its cash flow projections, adjusted for the effects caused by the
ongoing war in Ukraine and potential absence of VAT refunds, for the period of
management's going concern assessment covering a period of 18 months from the
date of the approval of these interim condensed consolidated financial
statements;
· the feasibility and effectiveness of all available mitigating actions
within management's control for identified uncertainties;
· the legal merits in terms of the ongoing legal dispute regarding the
above mentioned contested sureties and potential future actions available to
protect the interests of the Group in case of a negative decision from the
Supreme Court;
· the suspension of VAT refunds, which might not resume as expected by
management; and
· the risk of nationalisation 49.5% of shares in FPM and certain of its
assets, which are outside of management's control, the uncertainty in relation
to the independence of the judicial system and its immunity from economic and
political influences in Ukraine, which could have an impact on the outcome of
the ongoing legal disputes,
there remains a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern.
In respect of the contested sureties claim mentioned above, no decision has
been made by the Supreme Court as at the date of the approval of these interim
condensed consolidated financial statements. The next hearing before the
Supreme Court is scheduled for 8 September 2025. If the Supreme Court rules in
favour of the claimants in this case, the commencement of enforcement
procedures could potentially have a material negative impact on the Group's
business activities and its ability to continue as a going concern. In
connection with the contested sureties claim, the counter party filed an
application for bankruptcy of FPM and a hearing scheduled for 24 July 2025 was
postponed. A further hearing is yet to be scheduled. In the event of a
negative decision by the court of first instance, the Group will appeal. In
the meantime, it is not possible to assess the potential impact of such
bankruptcy proceedings and their timing, as these depend on further court
proceedings, which may extend over a considerable period of time. In terms of
the claim received regarding alleged illegal mining and selling of subsoil
(minerals other than iron ore), the date of the next hearing is currently not
known, and it can be assumed that this will be a lengthy process. However,
considering the magnitude of the subsoil claim, a final decision by the
Supreme Court, after potential negative decisions in the lower courts in
Ukraine, could have a negative impact on the Group's ability to continue as a
going concern. See Note 19 Commitments, contingencies and legal disputes for
further information, which should be read in conjunction with this note. As
disclosed in Note 8 Taxation, the Group's two major subsidiaries in Ukraine
received tax audit reports in September and November 2023, stating potential
claims for underpayment of corporate profit taxes in Ukraine of UAH2,162
million (US$51,920 thousand as at 30 June 2025) and UAH259 million (US$6,220
thousand as at 30 June 2025), respectively. Negative decisions by the court of
appeal, after potential negative decisions of the court of first instance, is
likely to have a significant impact on the Group's future cash flow generation
and available liquidity and, as a consequence, on the Group's ability to
continue as a going concern See Note 8 Taxation for further information.
As at the date of the approval of these interim condensed consolidated
financial statements, the Group's operations, located adjacent to the city of
Horishni Plavni, have not been directly affected by the ongoing war, but this
remains a risk. Should the area surrounding the Group's operations become
subject to the armed conflict, there would be a significant risk posed to the
safety of the Group's workforce and the local community, as well as a
significant risk to key assets and the infrastructure required for the Group
to operate effectively. See the Update on Principal Risks section on pages 21
and 22 for further information on the Ukraine country risk.
Considering the current situation of the ongoing war and the Group's legal
disputes in Ukraine, the Group continues to prepare its interim condensed
consolidated financial statements on a going concern basis. This conclusion is
based on the Group's ability to swiftly adapt to changing circumstances caused
by the war, the effects from the suspension of VAT refunds in Ukraine and the
independent legal advice received regarding the merits of the ongoing legal
actions against the Group in Ukraine. However, as explained above, many of the
identified uncertainties in respect of the ongoing war and legal disputes are
outside of management's control, and are unpredictable, which may cast
significant doubt upon the Group's ability to continue as a going concern. For
more information on critical judgements made by management in preparing these
interim condensed consolidated financial statements, see also Note 19
Commitments, contingencies and legal disputes in respect of other ongoing
legal proceedings and disputes.
If the Group is unable to continue to realise assets and discharge liabilities
in the normal course of business, it would be necessary to adjust the amounts
in the statement of financial position in the future to reflect these
circumstances, which may materially change the measurement and classification
of certain figures contained in these interim condensed consolidated financial
statements.
Accounting policies adopted
The accounting policies and methods of computation adopted in the preparation
of the interim condensed consolidated financial statements are consistent with
those followed in the preparation of the Group's annual financial statements
for the year ended 31 December 2024, except for the adoption of the new
standards, interpretations and amendments to IFRS listed below that became
effective as of 1 January 2025, although without an impact on the Group's
interim condensed consolidated financial statements as at 30 June 2025.
· Amendments to IAS 21 Lack of Exchangeability provide guidance on when
a currency is exchangeable into another currency, and further clarify how a
spot rate is estimated when a currency lacks exchangeability.
Use of critical estimates and judgements
In the course of preparing financial statements, management has to make
estimates and judgements that can have a significant impact on the Group's
interim condensed consolidated financial statements.
The most critical accounting estimates include
· those required in terms of the computation of the value in use of the
Group's non-current assets as a result of the ongoing war and legal actions
against the Group in Ukraine, including the suspension of VAT refunds since
March 2025 (Note 10 Property, plant and equipment, and Note 12 Intangible
assets);
Critical judgements predominantly relate to
· the basis of preparation of these interim condensed consolidated
financial statements in respect of the going concern assumption (see above) as
a result of the ongoing war and operating in a developing economy, which may
or may not be exacerbated by the war and/or the current circumstances facing
the Group's controlling shareholder;
· the application of tax legislation in the jurisdictions the Group
operates (Note 8 Taxation);
· the recoverability of outstanding VAT in Ukraine (Note 13: Other
taxes recoverable and prepaid); and
· the assessment of ongoing legal proceedings and claims in an
environment of political, fiscal and legal uncertainties (Note 19 Commitments,
contingencies and legal disputes).
The use of inaccurate assumptions in assessments made for any of these
estimates and judgements could result in a significant impact on the Group's
financial position and financial performance. With the exception of the
situation regarding VAT in Ukraine, there are no significant changes to the
afore-mentioned critical estimates and judgements compared to 31 December
2024. Detailed descriptions of the critical estimates and judgements are
disclosed in the respective disclosure notes stated above.
Seasonality
The Group's operations are not affected by seasonality.
Note 3: Segment information
The Group is managed as a single segment, which produces, develops and markets
its principal product, iron ore pellets, for sale to the metallurgical
industry. While the revenue generated by the Group is monitored at a more
detailed level, there are no separate measures of profit reported to the
Group's Chief Operating Decision-Maker ("CODM"). In accordance with IFRS 8
Operating Segments, the Group presents its results in a single segment, which
are disclosed in the interim consolidated income statement for the Group.
Management monitors the operating result of the Group based on a number of
measures including Underlying EBITDA, gross profit and net cash.
Underlying EBITDA and gross profit
The Group presents the Underlying EBITDA as it is a useful measure for
evaluating its ability to generate cash and its operating performance. The
Group amended its definition of Underlying EBITDA during the financial year
2024 by excluding operating foreign exchange gains and losses. The full
definition of Underlying EBITDA and details in respect of the amended
definition are provided in the Alternative Performance Measures ("APMs")
section.
US$000 Notes 6 months ended 6 months ended Year ended
31.12.24
30.06.25 30.06.24
(unaudited) (unaudited) (audited)
(Loss)/profit before tax and finance (193,497) 100,655 19,928
(Gains)/losses on disposal and liquidation of property, plant and equipment 5 (74) 45 231
Share-based payments 274 113 320
Write-offs/(backs) and impairments 5 154,309 (118) 71,871
Depreciation and amortisation 5 35,586 33,606 60,281
Operating foreign exchange losses/(gains) 6 7,292 (55,258) (83,321)
Underlying EBITDA 3,890 79,043 69,310
US$000 Notes 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Revenue 4 452,607 548,535 933,263
Cost of sales 5 (310,917) (314,221) (597,438)
Gross profit 141,690 234,314 335,825
Net cash
Net cash as defined by the Group comprises cash and cash equivalents less
interest-bearing loans and borrowings.
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Cash and cash equivalents 16 52,262 105,919 115,131
Lease liabilities - current 17 (2,476) (4,665) (3,092)
Lease liabilities - non-current 17 (241) (419) (528)
Net cash 49,545 100,835 111,511
With the exception of lease liabilities, the Group does not have any
outstanding interest-bearing loans and borrowings as at 30 June 2025 and the
end of the comparative periods ended 31 December 2024 and 30 June 2024.
Net cash is considered to be an APM and further information on the APMs used
by the Group, including the definitions, is provided in the APM section.
Note 4: Revenue
Revenue for the six-month period ended 30 June 2025 consisted of the
following:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Revenue from sales of iron ore pellets and concentrate 386,946 491,000 831,807
Freight revenue related to sales of iron ore pellets and concentrate 44,383 31,334 49,691
Total revenue from sale of iron ore pellets and concentrate 431,329 522,334 881,498
Revenue from logistics and bunker business 19,467 22,709 46,139
Revenue from other sales and services provided 1,811 3,492 5,626
Total revenue 452,607 548,535 933,263
Information on the commodity risk related to provisionally priced sales are
provided in Note 18 Financial instruments.
Total revenue from sales of iron ore pellets and concentrate by geographical
destination were as follows:
US$'000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Europe, including Turkey 200,915 419,527 668,425
China & South East Asia 206,974 89,965 148,363
Middle East & North Africa 23,440 12,842 64,710
Total revenue from sale of iron ore pellets and concentrate 431,329 522,334 881,498
The Group markets its products across various regions. The disclosure of the
segmentation reflects how the Group makes its business decisions and monitors
its sales. Information about the composition of the regions is provided in the
Glossary. The Group's sales of iron ore pellets and concentrate were still
significantly below pre-war levels because of the ongoing war in Ukraine as it
was also the case for the comparative periods ended 30 June 2024 and 31
December 2024. The Group's seaborne sales continued to benefit from the
availability of the Ukrainian Black Sea ports, which had been closed since the
beginning of the war, but were reopened again during the financial year 2024.
The Group's sales for the six-month period ended 30 June 2025 were also
affected by the suspension of VAT refunds in Ukraine, which required the
downscaling of the Group's operation in Ukraine to minimise the impact on the
Group's liquidity. See Note 13: Other taxes recoverable and prepaid for
further details.
Note 5: Operating expenses
Operating expenses for the six-month period ended 30 June 2025 consisted of
the following:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Cost of sales 310,917 314,221 597,438
Selling and distribution expenses 133,344 147,750 246,300
General and administrative expenses 31,406 31,968 68,974
Other operating expenses 165,672 14,479 91,733
Total operating expenses 641,339 508,418 1,004,445
Total operating expenses include:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Inventories recognised as an expense upon sale of goods 297,353 304,935 566,526
Employee costs (excl. logistics and bunker business) 41,137 42,091 85,435
Inventory movements 32,953 9,469 4,961
Depreciation of property, plant and equipment and right-of-use assets 3 35,223 33,380 59,392
Amortisation of intangible assets 3 363 226 889
Royalties 13,678 19,675 32,187
Costs of logistics and bunker business 20,680 27,756 54,991
Audit and non-audit services 1,385 971 2,239
Community support donations 921 3,685 4,319
Write-offs/(backs) and impairments 154,309 (118) 71,871
(Gains)/losses on disposal and liquidation of property, plant and equipment (74) 45 231
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Write-(back)/offs of inventories (14) (123) 81
Write-offs of property, plant and equipment − 5 155
Total write-(backs)/offs (14) (118) 236
Impairment of property, plant and equipment 154,323 − 71,635
Total impairments 154,323 − 71,635
Total write-offs/(backs) and impairments 154,309 (118) 71,871
Note 6: Foreign exchange gains and losses
Foreign exchange gains and losses for the six-month period ended 30 June 2025
consisted of the following:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Operating foreign exchange (losses)/gains
Conversion of trade receivables (6,724) 55,162 83,588
Conversion of trade payables (562) 26 (283)
Others (6) 70 16
Total operating foreign exchange (losses)/gains (7,292) 55,258 83,321
Non-operating foreign exchange gains/(losses)
Conversion of interest-bearing loans 8,205 (26,196) (37,591)
Conversion of cash and cash equivalents (143) 398 673
Others (368) 822 (2,437)
Total non-operating foreign exchange gains/(losses) 7,694 (24,976) (39,355)
Net foreign exchange gains 402 30,282 43,966
Operating foreign exchange gains and losses are those items that are directly
related to the production and sale of pellets (e.g. trade receivables, trade
payables on operating expenditure) whereas non-operating gains and losses are
those associated with the Group's financing and treasury activities and with
local income tax payables.
The translation differences and foreign exchange gains and losses are
predominantly dependent on the fluctuation of the exchange rate of the
Ukrainian hryvnia against the US dollar and the outstanding US dollar
denominated receivable balances in Ukraine. A devaluation of the local
currency has generally a positive effect on the Group's production costs and
results in operating foreign exchange gains on the conversion of the Ukrainian
subsidiaries' trade receivables denominated in US dollar. The effect arising
on the translation of non-US dollar functional currency operations, mainly in
Ukrainian hryvnia, are included in the translation reserve. See Note 20 Share
capital and reserves for further details.
The Ukrainian hryvnia appreciated marginally from 42.039 to 41.641 compared to
the US dollar during the six month period ended 30 June 2025. A devaluation of
the local currency can result in significant foreign exchange gains on US
dollar denominated receivable balances, depending on the underlying net
balances, and a reduction of the Group's net assets as a significant portion
of assets and liabilities of the Ukrainian subsidiaries are denominated in the
local currency, with an opposite effect in case of an appreciation of the
local currency in Ukraine.
The table below shows the closing and average rate of the most relevant
currencies of the Group compared to the US dollar.
Average exchange rate Closing exchange rate
Against US$ 6 months ended 6 months Year As at As at As at
30.06.25 ended ended 30.06.25 31.12.24 30.06.24
30.06.24 31.12.24
UAH 41.631 39.009 40.152 41.641 42.039 40.537
EUR 0.916 0.925 0.924 0.852 0.963 0.933
Note 7: Net finance expense
Finance expense and income for the period ended 30 June 2025 consisted of the
following:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Finance expense
Net interest on defined benefit plans (1,693) (1,249) (2,433)
Bank charges (303) (296) (1,304)
Interest expense on lease liabilities (62) (106) (191)
Other finance costs (183) (261) (1,051)
Total finance expense (2,241) (1,912) (4,979)
Finance income
Interest income 1,145 1,897 3,979
Other finance income − 7 7
Total finance income 1,145 1,904 3,986
Net finance expense (1,096) (8) (993)
With the exception of lease liabilities, the Group
does not have any outstanding interest-bearing loans and borrowings and no
borrowing costs are therefore capitalised. See Note 17 Lease liabilities for
further information.
Note 8: Taxation
The Group pays corporate profit tax in a number of jurisdictions, Ukraine,
Switzerland, the United Kingdom and the U.A.E. (Dubai), and its effective tax
rate is subject to various factors outside of the Group's control. This
includes the volatility in the global iron pellet market and foreign exchange
rates, primarily between the Ukrainian hryvnia and the US dollar.
The expected weighted average statutory income tax rate for the financial year
2025 is 19.9% (30 June 2024: 23.7%; 31 December 2024: 15% before the effect
from the impairment loss of US$71,635 thousand) before any special items
included in the profit before tax for the period and income tax expense. The
expected tax rate for a financial year is computed based on the expected
taxable profits in the Group's major jurisdictions taken from the latest
forecast multiplied with the enacted statutory tax rates in these
jurisdictions.
The effective tax rate as of 30 June 2025 is affected by the additional
impairment loss of US$154,323 thousand on the Group's non-current operating
assets, which is primarily to be allocated to the Group's operations in
Ukraine, and the effect from extracted low grade ore totaling US$11,838
thousand, which are both not tax deductible in Ukraine. As a consequence,
there is no deferred tax effect recognised in respect of the impairment loss
recorded as it was done in the past on previously recorded impairment losses.
The Group is also in a loss position before the significant impairment loss
recorded as at 30 June 2025, and no deferred tax assets have been recognised
on the resulting tax losses carried forwards as it is currently uncertain
whether the Group's subsidiaries in the various jurisdictions will be able to
benefit from them in the near future. Because of these effects, the effective
tax rate for the first half of the financial year 2025 was positive at 4.9%
and therefore not comparable to the comparative periods. The effective tax
rate for the comparative period ended 30 June 2024 was 26.7% whereas the rate
was 33.7% for the financial year 2024, after the elimination of exceptional
items resulting in a loss before tax. Without the special effects mentioned
above, the effective tax rate would have been 29.4%, still positive due to the
overall loss position of the Group as at 30 June 2025 (30 June 2024: 23.9%; 31
December 2024: 145.0%).
The income tax expense for the period ended 30 June 2025 consisted of the
following:
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Current income tax
Current income tax charge 5,545 17,554 18,784
Amounts related to previous years 627 1,885 2,374
Total current income tax 6,172 19,439 21,158
Deferred income tax
Origination and reversal of temporary differences 2,933 742 8,452
Total deferred income tax 2,933 742 8,452
Total income tax expense 9,105 20,181 29,610
The net income tax payable as at 30 June 2025 consisted of the following:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Income tax receivable balance 7,783 7,026 65
Income tax payable balance (17,978) (13,561) (16,239)
Net income tax payable (10,195) (6,535) (16,174)
Critical judgements
The Group operates across a number of jurisdictions through its value chain
and prices its sales between its subsidiaries using international benchmark
prices for comparable products covering product quality and applicable freight
costs. Despite two claims received in Ukraine in 2023, the Group is still of
the opinion that the terms of the cross-border transactions between the
subsidiaries of the Group comply with the legislation applicable in the
jurisdictions in which it operates.
In connection with two audits initiated by the State Tax Service of Ukraine
("STS") , formerly known as State Fiscal Service of Ukraine ("SFS"), on 18
February and on 14 June 2021 the Group's two major subsidiaries in Ukraine
received tax audit reports on 13 September 2023 and 8 November 2023, stating
potential claims for underpayment of corporate profit taxes in Ukraine of
UAH2,162 million (US$51,920 thousand as at 30 June 2025), including fines and
penalties, and UAH259 million (US$6,220 thousand as at 30 June 2025), without
potential fines and penalties, respectively.
The two claims received are in relation to cross-border transactions for iron
ore products between the two Ukrainian subsidiaries of the Group and two
subsidiaries of the Group outside of Ukraine during the financial years 2015
to 2017. Based on previous experience, no agreements could be reached with the
tax authorities and the claims are to be heard by the courts in Ukraine. As a
result, both subsidiaries filed the objections against the potential claims
stated in the tax audit reports received. After various preparatory meetings
in 2024 for both cases, the first hearings on the merits before the court of
first instance took place in November 2024, followed by several hearings later
in 2024 and in 2025. These hearings are still ongoing and, as a result, the
court of first instance has not yet made any final decisions as at the date of
the approval of these interim condensed consolidated financial statements.
A partially negative verdict of the Supreme Court was received by one of the
Group's subsidiaries in respect of claims made by the STS as a result of a tax
audit of cross-border transactions for the period from 1 September 2013 to 31
December 2015. It is the Group's position that the STS used the verdict of the
Supreme Court on the claims for the period from 1 September 2013 to 31
December 2015 as a precedent for the claims made for cross-border transactions
during the financial years 2015 to 2017, although the Supreme Court did not
appropriately consider relevant technical grounds and the applicable
legislation when ruling on this specific case.
In terms of the claims received, the Group will continue to defend its
methodology applied to determine the prices between its subsidiaries in the
Ukrainian courts, but there is a risk that the independence of the judicial
system and its immunity from economic and political influences in Ukraine is
not upheld. As at the date of the approval of these interim condensed
consolidated financial statements, no final court decisions have been made for
the above-mentioned claims received by the two Ukrainian subsidiaries of the
Group and, as a consequence, no provisions have been recorded as at 30 June
2025, neither for the claims received nor for any subsequent years, which
might also be material, as it is impossible to reasonably quantify the
potential exposure. Negative decisions by the court of appeal, after potential
negative decisions of the court of first instance, is likely to have a
significant impact on the Group's future cash flow generation and available
liquidity and, as a consequence, on the Group's ability to continue as a going
concern. See Note 2 Summary of material accounting policies for further
information.
Separate from the cases mentioned above, on 23 June 2020 Ferrexpo Poltava
Mining ("FPM") received a court ruling, which grants access to information and
documents to the State Bureau of Investigation in Ukraine ("SBI") in relation
to the sale of iron ore products to two subsidiaries of the Group outside of
Ukraine during the years 2013 to 2019. FPM cooperated with the SBI and
provided the requested information as per the court ruling to support these
investigations. On 20 October 2023, the SBI raided the FPM offices with the
intention of collecting documents and information for ongoing transfer pricing
investigations. In October 2024, FPM became aware of a new transfer pricing
investigation by the SBI in connection with the financial years 2014 to 2017.
There had been no actions or any new requests from the SBI as at the date of
the approval of these interim condensed consolidated financial statements
In accordance with the provisions of IFRIC 23 Uncertainty over income tax
treatments, the Group reviewed and reassessed its exposure in respect of all
uncertain tax positions, including the claims received and for cross-border
transactions in subsequent years. It is the position of management of the
Group and the Group's external tax advisors that the Ukrainian legislation and
regulations on taxation are not always clearly written and are therefore
subject to varying interpretations and inconsistent enforcement by local,
regional and national tax authorities.
Considering the uncertainties in terms of the legal and tax framework in
Ukraine, the Group will continue to defend its pricing methodology applied
during all the years in the courts in Ukraine. An unfavourable outcome of any
future court proceedings would have an adverse impact on the Group's total
income tax expense and effective tax rate in future periods. See also the
Update on Principal Risks section for further information on the Ukraine
country risk.
Except for the matters in Ukraine mentioned above, the Group is not aware of
any other significant challenges by local tax authorities in any jurisdictions
in which the Group operates. However, the application of international and
local tax legislation and regulations can be complex and requires judgement to
assess possible associated risks, particularly in relation to the Group's
cross-border operations and transactions.
The net deferred income tax assets as at 30 June 2025 consisted of the
following:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Total deferred tax assets 1,274 2,259 9,247
Total deferred tax liabilities (6,299) (4,347) (3,333)
Net deferred tax liabilities (5,025) (2,088) 5,914
The net deferred tax liability balance of US$5,025 thousand (31 December 2024:
net deferred tax liability of US$2,088 thousand; 30 June 2024: net deferred
tax asset of US$5,914 thousand) includes net deferred tax liabilities totaling
US$720 thousand (31 December 2024: net deferred tax assets totaling US$1,799
thousand; 30 June 2024: net deferred tax assets totaling US$9,166 thousand)
related to temporary differences of the Group's two major subsidiaries in
Ukraine, with the remaining balance reflecting deferred tax liabilities of
subsidiaries outside of Ukraine. The net deferred tax assets in Ukraine are
net of a total allowance of US$34,090 thousand (31 December 2024 US$22,956
thousand; 30 June 2024: US$20,324 thousand). The allowance increased by
US$11,134 thousand as at 30 June 2025 and the allowances recorded in the
comparative periods were affected by the appreciation of the local currency in
Ukraine. The recoverability of these deferred tax assets depends on the level
of taxable profits realised by the two subsidiaries in future periods and the
duration of the unwind of the temporary differences. Due to the material
uncertainty in terms of the Group's going concern, the relevant period for the
recovery of the recognised net balance of deferred tax assets has been aligned
to the period of the going concern assessment.
Temporary differences of US$701,792 thousand, including the allowances
mentioned above, have not been recognised as at 30 June 2025 (December 2024:
US$491,909 thousand). Of those temporary differences, the vast majority
relates to impairment losses of US$145,699 thousand, US$67,699 thousand and
US$175,088 thousand recorded as at 30 June 2025, 31 December 2024 and 31
December 2022 respectively. In addition to these temporary differences,
US$115,694 thousand relate to provisions for legal disputes recorded in
Ukraine as at 31 December 2023. The remaining balance of US$195,474 thousand
(31 December 2024: US$133,429 thousand; 30 June 2024: US$112,779 thousand)
predominantly relates to temporary differences for which allowances for
recognised deferred tax assets have been recorded.
The level of taxable profits in Ukraine depends on many factors, such as the
volatility in the global iron pellet market and foreign exchange rate changes,
but also on the implications of the ongoing war in Ukraine, such as the
potential interruption of power supply and the unavailability of the required
logistics network.
BEPS - Pillar Two
The Group is in the scope of the BEPS Pillar Two Model Rules as the
consolidated revenues for the financial years 2024, 2022 and 2021 were above
the threshold set by the OECD rules.
The Group makes use of the temporary exception issued by the IASB in May 2023
in respect of the accounting requirements for deferred taxes under IAS 12. As
a result, the Group does neither recognise nor disclose any information on
deferred tax assets and liabilities related to Pillar Two income taxes in its
interim condensed consolidated financial statements for the six month period
ended 30 June 2025, which is consistent with the application during the
comparative financial year 2024.
Based on the BEPS Pillar Two Global Anti-Base Erosion ("GloBE") Model Rules,
the parent company of the Group, Ferrexpo plc with its tax domicile in
Switzerland, is the Ultimate Parent Entity ("UPE") and, as a result, the
enacted legislation in Switzerland is most relevant for the Group. On 22
December 2023, the Swiss government enacted the Pillar Two income taxes
legislation, which came into force on 1 January 2024 and provided for the
Qualifying Domestic Minimum Top-up Tax ("QDMTT"). On 4 September 2024, the
Swiss government decided to implement the Income Inclusion Rule ("IIR") as of
1 January 2025, whereas the implementation of the Undertaxed Profits Rule
("UTPR") is still postponed.
Although the Group's effective tax rate for the financial year 2025 is
expected to be well above the minimum tax rate of 15.0%, there are two
jurisdictions where the Group is operating with enacted statutory tax rates
below the minimum tax rate of 15.0% set under the BEPS Pillar Two Model Rules.
As a result of the legislation enacted in Switzerland, the Group's
subsidiaries in Switzerland are potentially subject to the QDMTT for taxable
profits from the financial year 2025 and those of the Group's subsidiary in
the U.A.E. (Dubai) are potentially subject to the QDMTT in the U.A.E., which
has been implemented, effective for financial years starting on or after 1
January 2025.
There was no significant impact from the QDMTT, the IIR and the UTPR under the
BEPS Pillar Two GloBE Model Rules on the Group's income tax expense and did
therefore did not have a significant effect on the Group's effective tax rate
as at 30 June 2025. The total effect from top-up tax within the Group amounts
to US$192 thousand in connection to QDMTT in the U.A.E.
Taking also into account the implementation of the QDMTT in Switzerland and in
the U.A.E. and the IIR in Switzerland, the Group's future effective tax rate,
before any special items included in the profit before tax for the period and
the income tax expense, is expected to be in a range of 18.0% to 20.0%. The
Group's effective tax rate is also dependent on the volatility in the global
iron ore pellet market and on foreign exchange rate movements, primarily
between the Ukrainian hryvnia and the US dollar, and any one-off events, such
as impairment losses that might not be tax deductible in some jurisdictions.
As mentioned above, the Group has had special items in the past that had a
significant impact on the effective tax rate.
Note 9: Earnings per share and dividends paid and proposed
Basic earnings per share ("EPS") are calculated by dividing the net profit for
the period attributable to ordinary equity shareholders of Ferrexpo plc by the
weighted average number of Ordinary Shares.
Diluted earnings per share are calculated by adjusting the weighted average
number of Ordinary Shares in issue on the assumption of conversion of all
potentially dilutive Ordinary Shares. All share awards are potentially
dilutive and have been considered in the calculation of diluted earnings per
share.
6 months ended 30.06.25 (unaudited) 6 months ended 30.06.24 (unaudited) Year ended 31.12.24
(audited)
(Loss)/earnings for the period/year attributable to equity shareholders - per
share in US cents
Basic (33.31) 9.43 (8.51)
Diluted (33.31) 9.26 (8.51)
(Loss)/profit for the period/year attributable to equity shareholders - US$000
Basic and diluted (loss)/earnings (196,000) 55,471 (50,046)
Weighted average number of shares - thousands
Basic number of ordinary shares outstanding 588,374 588,335 588,363
Effect of dilutive potential ordinary shares 11,731 10,709 11,061
Diluted number of ordinary shares outstanding 600,105 599,044 599,424
The basic number of ordinary shares is calculated by subtracting the weighted
average of shares held in treasury and employee benefit trust reserves from
the total number of ordinary shares in issue.
Dividends proposed and paid
In view of the continued unpredictable situation in Ukraine, no interim
dividends were proposed for the six-month period ended 30 June 2025 as at the
date of the approval of these interim condensed consolidated financial
statements. Considering the provisions of the Companies Act 2006 and relevant
thin capitalisation rules, the total available distributable reserves of
Ferrexpo plc would be approximately US$77,500 thousand for the remainder of
the financial year 2025.
Future distributable reserves at the Ferrexpo plc level are also dependent on
the payment of dividends by the subsidiaries to the respective parent
companies within the Group. Further to that, the distributable profits at
subsidiaries' level are subject to potential impairment losses and provisions
for legal disputes to be or already recorded in the respective stand-alone
statutory financial statements as a result of uncertainties in Ukraine in
connection with the ongoing war and legal disputes. Certain Group companies
are currently restricted from paying dividends outside of Ukraine due to
Ukrainian currency control measures imposed under Martial Law. Furthermore,
the uncertainties related to the political environment and the independence of
the legal system and other circumstances facing the Group (see Note 19
Commitments, contingencies and legal disputes) could also have a negative
impact on Ferrexpo plc's ability and potential for future dividend payments.
Further to that, an outflow of funds in connection with ongoing legal disputes
would have an adverse impact on the Group's available liquidity for potential
future dividend payments, despite a considerable amount of distributable
profits of one of the Group's subsidiary in Ukraine.
As disclosed in Note 2 Summary of material accounting policies, a
nationalisation of 49.5% of shares in Ferrexpo Poltava Mining ("FPM") or a
transfer of 49.5% of the corporate rights in FPM to Ukraine's Asset Recovery
and Management Agency ("ARMA") for management of these corporate rights will
also have an impact on the equity attributable to the shareholders of Ferrexpo
plc and its future distributable reserves.
US$000 6 months ended 6 months ended 30.06.24 Year ended
31.12.24
30.06.25
(unaudited) (unaudited) (audited)
Dividends paid during the period
Dividends on vested 2022 LTIP awards 5 − −
Dividends on vested 2021 LTIP awards − 44 46
Total dividends paid during the period 5 44 46
Although accounts are published in US dollars and dividends are declared in US
dollars, the shares are denominated in UK Pounds sterling and dividends are
therefore paid in UK Pounds sterling.
Note 10: Property, plant and equipment
During the six-month period ended 30 June 2025, the additions to property,
plant and equipment totalled US$29,457 thousand (31 December 2024: US$121,776
thousand; 30 June 2024: US$61,441 thousand) and the net book value of the
disposals of property, plant and equipment totalled US$1,218 thousand (31
December 2024: US$12,136 thousand; 30 June 2024: US$6,065 thousand).
The total depreciation charge for the period was US$34,418 thousand (31
December 2024: US$59,257 thousand; 30 June 2024: US$33,380 thousand).
Assets under construction consist of ongoing capital projects amounting to
US$188,150 thousand (31 December 2024: US$232,773 thousand; 30 June 2024:
US$252,443 thousand) and capitalised pre-production stripping costs of
US$31,712 thousand (31 December 2024: US$38,420 thousand; 30 June 2024:
US$36,232 thousand) for components of ore bodies expected to be put into
operation in future periods only. Once the extraction of ore commences in
relation to these ore bodies, the capitalised stripping costs are transferred
to mining assets and the depreciation commences.
The carrying value of property, plant and equipment includes capitalised
borrowing costs on qualifying assets totalling US$23,826 thousand (31 December
2024: US$25,073 thousand; 30 June 2024: US$27,608 thousand). No borrowing
costs were capitalised during the period ended 30 June 2025 or the comparative
periods.
Critical estimates
The most critical accounting estimates include those required in terms of the
computation of the value in use of the Group's non-current assets as a result
of the ongoing war and legal actions against the Group in Ukraine, including
the suspension of VAT refunds since March 2025.
On 12 February 2025, the National Security and Defence Council of Ukraine (the
"NSDC") adopted the decision later enacted by the Presidential Decree No.
81/2025, to impose personal special economic and other restrictive measures
("sanctions") on certain individuals, including Mr Zhevago. These sanctions
imposed on Mr Zhevago are personal in nature and have not been imposed on
Ferrexpo plc, Ferrexpo AG ("FAG"), Ferrexpo Poltava Mining ("FPM") or any
other member of the Ferrexpo Group. This sanction was treated as a
non-adjusting post balance sheet event in the consolidated financial
statements for the year ended 31 December 2024 and as disclosed in the Note 35
Events after the reporting period of these accounts, this event was expected
to become an adjusting event in the interim condensed consolidated financial
statements for the period ended 30 June 2025. Due to the personal sanctions
imposed on Mr Zhevago, it was expected that VAT refunds in Ukraine would be
rejected by the local tax authorities, which required the adjustment of the
Group's long-term model used for the impairment.
In addition to ongoing legal actions taken by the Ukrainian government against
the Group, including the effects of the personal sanctions on Mr Zhevago, the
Group's operation in Ukraine is still affected by the ongoing war in Ukraine.
Despite the ongoing war and the legal actions against the Group in Ukraine,
the Group continued to demonstrate its resilience and flexibility from an
operating perspective during the six-month period ended 30 June 2025, although
both threats have a negative impact on the Group's profitability and cash flow
generation and, as a consequence, on the valuation of the non-current
operating assets, predominantly located in Ukraine. As at the date of the
approval of these interim condensed consolidated financial statements, the war
and the legal disputes in Ukraine are still ongoing and the duration and
possible implications on the Group's operation are difficult to predict.
The situation in Ukraine remains unpredictable and continues to require the
Group to be extremely flexible, as mining operations and production have to be
adapted to the prevailing conditions. Following the rejection of VAT refunds
in Ukraine, the Group adjusted its production plan to mitigate working capital
outflows and preserve cash, affecting also the Group's cash flow generation in
future periods and resulting in a delay of the ramp-up of its operation to
pre-war levels. The Group's impairment test is based on cash flow projections
over the remaining estimated lives of the GPL and the Yerystivske deposits,
which are expected to expire in 2058 and 2048, respectively, according to the
current approved mine plans. The cash flow projection is based on a financial
long-term model approved by senior management and the effects of expected
future mine life extension programmes are not taken into account the estimated
future production volumes. As in the past, several significant judgements and
estimates are used when preparing the financial long-term model of the Group,
which are, together with the key assumptions used, reviewed by the Audit
Committee with specific consideration given to the realistically plausible
production volumes in light of the current situation in the country, sales
price and production cost forecasts as well as the discount rate used to
discount the cash flows.
The financial long-term model was updated in June 2025 using management's best
estimate of reasonably conservative key assumptions, taking also into account
the current circumstances the Group has to operate in, including the effects
from the rejection of VAT refunds in Ukraine on the Group's development in
future periods. In terms of the key assumptions used, an average iron ore
price of US$107 per tonne of 65% Fe fines CFR North China was used in the
assumptions for the cash flow projection for the next five years. When
assessing its expected future long-term selling price, the Group considers
external and internal analysis of the short-term and longer-term supply and
demand dynamics on the international market for iron ore products as well as
more specific local supply and demand balances affecting its major customers.
The level of the Group's production is currently restricted due to outstanding
VAT refunds and remains predominantly dependent on a constant power supply and
the logistics network available to the Group as well as other potential
adverse effects on the Group's operation due to the ongoing war. As a result
of the current restrictions, the production capacity used for the cash flow
projection under the base case is expected to be approximately 55% of the
pre-war level for the financial year 2025, before an increase to approximately
47% in 2026 and an expected recovery to pre-war levels in 2028. Because of an
increased demand for high-grade concentrate, the share of concentrate
production increased significantly compared to the previous long-term model
and averaged around 30% for the years covered by the long-term model. There is
no perpetual growth rate applied for the cash flow projections beyond the last
year covered by the Group's long-term model. The Group's expected major cost
components, such as production and shipping costs, are determined taking into
account local inflationary pressure, major exchange rate developments between
the Ukrainian hryvnia and the US dollar, the short-term and longer-term trends
in energy supply and demand and the expected movements in steel-related
commodity prices, which could have a material effect on the cost of certain
production input materials.
The key assumptions used for the preparation of the Group's long-term model
are:
Key assumptions Basis
Future sales and production Proved and probable reserves and available logistics capacity and power supply
Commodity prices Contract prices and longer-term price estimates
Capital expenditures Future sustaining capital expenditures
Cost of raw materials and other production/distribution costs Expected future cost of production
Exchange rates Longer-term predictions of market exchange rates
Nominal pre-tax discount rate Cost of capital risk adjusted for the resource concerned
The outcome of the Group's impairment test is predominantly dependent on the
forecasted cash flow generation and the nominal pre-tax discount rate to be
applied. The applied WACC of 23.5% (31 December 2024: 23.1%; 30 June 2024:
22.3%) is still significantly higher than the pre-war WACC of 13.8% as at 31
December 2021 and is primarily affected by the current situation in the
country as underlying macro-economic data is still adversely affected by the
war in Ukraine.
According to the base case of the Group's impairment test prepared for the
2025 half year accounts, the value in use of the Group's single
cash-generating unit's operating non-current assets, including property, plant
and equipment as well as other intangible assets and other non-current assets,
was US$154,107 thousand below the carrying value of these assets, reflecting
the impairment loss recorded in this amount as at 30 June 2025 and allocated
to various asset categories within property, plant and equipment. The key
assumptions in respect of production and sales volumes are largely dependent
on the point of time when VAT refunds in Ukraine will resume again, whereas
the production costs are dependent on end of the war in Ukraine, and therefore
a wide range of alternative outcomes are possible, reflecting a high level of
uncertainty.
A delay of the recovery of the production and sales volumes to a pre-war level
by another year, which is possible, if VAT refunds are not resumed as
expected, with all other assumptions remaining unchanged, would reduce the
value in use of the Group's non-current operating assets by approximately
US$386,000 thousand. As disclosed in Note 19 Commitments, contingencies and
legal disputes, in March 2025, Ferrexpo Poltava Mining ("FPM") and Ferrexpo
Yeristovo Mining ("FYM") did not receive VAT refunds since March 2025 and
filed both lawsuits to the court in relation to the VAT refunds suspended by
the State Tax Service ("STS"). A delay of recovery of the production and sales
volumes to pre-war level might also be caused by the suspension of VAT refunds
in Ukraine, if suspended longer than expected by management. A reduction of
the realised price by 10% in 2025 and 5% for each year until 2048 would reduce
the value in use by approximately US$169,700 thousand and a decrease of the
production and sales volume by 10%, combined with an increase of the
production costs by 5%, again for the entire period of the assessment, would
reduce the value in use by approximately US$236,800 thousand whereas every
1.0% increase of the nominal pre-tax discount rate would impact the value in
use by approximately US$35,800 thousand, with all other assumptions remaining
unchanged.
The impairment loss of US$154,107 thousand is in addition to the impairment
losses of US$71,170 thousand and US$254,477 thousand recorded during the
financial years 2024 and 2022, of which the amounts of US$71,170 thousand and
US$219,931 thousand were allocated to various asset categories within
property, plant and equipment. The impairment losses recorded will be
re-assessed at the end of any future reporting periods.
If there are positive developments in the Group's future cash flow generation
and the relevant macro-economic data, the impairment loss or a portion of it
might reverse in future periods. Conversely, an adverse change in the above
key assumptions might further reduce the value in use of the Group's operating
non-current assets.
As disclosed in Note 2 Summary of material accounting policies and Note 19
Commitments, contingencies and legal disputes, the Group announced on 29
January 2024 that a Ukrainian court of appeal has confirmed a claim against
Ferrexpo Poltava Mining ("FPM") in the amount of UAH4,727 million (US$113,518
thousand as at 30 June 2025), in respect of contested sureties. FPM appealed
this decision to the Supreme Court of Ukraine and the court proceedings were
continued during the six-month period ended 30 June 2025. Despite the fact
that it was management's view that FPM has compelling arguments to defend its
position in the Supreme Court of Ukraine, given the magnitude of this specific
claim and the underdeveloped and fragile judicial system in Ukraine, the Group
recorded a full provision for this claim as at the end of the financial year
ended 31 December 2023 in accordance with IAS 37 Provisions, contingent
liabilities and contingent assets. If the ruling of the Supreme Court is not
in favour of FPM, there is a risk that some of the Group's property, plant and
equipment will be seized or subject to a forced sales process as part of the
enforcement proceedings. Although the Group has recognised a provision for the
full amount of the contested sureties claim, there is a risk that any assets
subject to seizure or a forced sales process are valued at an amount which is
different than their current carrying values as at 30 June 2025. Note 2
Summary of material accounting policies provides further information in terms
of the possible implications on the Group's ability to continue as a going
concern.
In addition to the case above and as disclosed in Note 10 Property, plant and
equipment, there is a risk of nationalisation of 49.5% of shares in FPM and
certain of its assets, which could potentially affect the availability of
FPM's property, plant and equipment and, as a consequence, the carrying value
of these assets included in the Group's interim condensed consolidated
financial statements. Due to the lack of information available at the date of
the approval of these interim condensed consolidated financial statements, it
is impossible to estimate the possible financial impact in future periods
Note 11: Right-of-use assets
As at 30 June 2025, right-of-use assets totalled US$2,655 thousand (31
December 2024: US$5,029 thousand; 30 June 2024: US$3,497 thousand). The
additions to the right-of-use assets totalled US$95 thousand (31 December
2024: US$4,184 thousand; 30 June 2024: nil).
The total depreciation charge for the period was US$2,508 thousand (31
December 2024: US$5,582 thousand; 30 June 2024: US$2,930 thousand).
For further information, see Note 17 Lease liabilities.
Note 12: Intangible assets
During the six-month period ended 30 June 2025, the additions to the
intangible assets totalled US$102 thousand (31 December 2024: US$692 thousand;
30 June 2024: US$356 thousand). The total amortisation charge for the period
was US$363 thousand (31 December 2024: US$889 thousand; 30 June 2024: US$226
thousand).
Critical estimates
Information on the critical estimates used for the Group's impairment test
performed as at 30 June 2025 and the outcome of the impairment test are
provided in Note 10 Property, plant and equipment.
Based on the impairment test performed, no impairment was to be recognised on
the intangible assets.
There is no partial or full reversal of the impairment loss to be recorded as
at 30 June 2025. The impairment loss recognised for goodwill is not subject to
a reversal in a subsequent period.
Note 13: Other taxes recoverable and prepaid
As at 30 June 2025, taxes recoverable and prepaid comprised:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
VAT receivable 26,769 35,270 43,753
Other taxes prepaid 903 1,026 656
Total other taxes recoverable and prepaid - current 27,672 36,296 44,409
VAT receivable 33,447 − −
Total other taxes recoverable and prepaid - non-current 33,447 − −
Total other taxes recoverable and prepaid 61,119 36,296 44,409
As at 30 June 2025, US$58,155 thousand of the VAT receivable relates to the
Group's Ukrainian business operations (31 December 2024: US$31,838 thousand;
30 June 2024: US$41,158 thousand). Following the rejection of VAT refunds in
Ukraine, it is expected that a portion of the outstanding VAT balance in
Ukraine will only be recovered after 12 months. See Note 19 Commitments,
contingencies and legal disputes for further information.
The total VAT receivable balance in the table above is net of an allowance of
US$1,965 thousand (31 December 2024: US$2,146 thousand; 30 June 2024: US$1,174
thousand) to reflect the uncertainties in terms of the timing of the recovery
of VAT receivable balances, mainly in respect of one of the Group's
subsidiaries in Ukraine.
Critical estimates
As disclosed in Note 19 Commitments, contingencies and legal disputes, in
March 2025, Ferrexpo Poltava Mining ("FPM") and Ferrexpo Yeristovo Mining
("FYM") received notifications from the Ukrainian tax authorities of a
decision to suspend the VAT refunds for the month of January 2025, expected to
be refunded in March 2025. Similar notifications have been received in April,
May and June for the VAT refunds for the months of February, March and April
2025, respectively.
As at 30 June 2025, VAT refunds in the aggregate amount of UAH1,299,057
thousand (US$31,197 thousand at this date) were suspended by the State Tax
Service ("STS"), which were expected to be refunded between March and June
2025. It is expected that VAT refunds will resume only once the personal
sanctions imposed on Mr Zhevago have been lifted or when positive decisions
from the relevant courts in Ukraine have been received. FPM and FYM have begun
filing lawsuits to the court in relation to the suspended VAT refunds for the
months of January, February and March 2025. Further to that, management is
continuing to monitor the situation closely and examining possible measures to
ensure that VAT refunds are received again in the near future. It is expected
that further clarity in respect of the recoverability of the outstanding VAT
balances will be available by the end of 2025 and the situation will be
reassessed, based on the developments in the courts. The absence of VAT
refunds does have an impact on the Group's cash flow generation and available
liquidity and, as a consequence, on the Group's ability to continue as a going
concern. See Note 2 Summary of material accounting policies for further
details.
Note 14: Inventories
As at 30 June 2025, inventories comprised:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Raw materials and consumables 42,653 43,540 49,989
Spare parts 81,695 85,076 84,583
Finished ore pellets 12,361 49,740 37,173
Work in progress 12,714 12,115 20,442
Other 1,676 2,037 2,303
Total inventories - current 151,099 192,508 194,490
Weathered ore 5,234 5,185 5,512
Total inventories - non-current 5,234 5,185 5,512
Total inventories 156,333 197,693 200,002
Inventories are held at the lower of cost or net realisable value.
Historically, inventories classified as non-current comprised of low-grade and
weathered ore that were, based on the Group's processing plans, not planned to
be processed within the next 12 months. The balance of US$5,234 thousand as at
30 June 2025 is net of impairment losses of US$231,111 thousand recorded as of
31 December 2021, as it was not possible to reliably predict at this point of
time when required additional processing capabilities will be available to
specifically process the stockpiled low-grade and weathered ore. The
stockpiled low-grade ore is still considered as an asset for the Group and a
portion of or all of the impairment losses might reverse in the future, once
changed facts and circumstances can be considered in the net realisable value
test of this asset. Due to the ongoing war in Ukraine resulting in a lower
cash flow generation, it is currently impossible to accelerate the commenced
engineering studies for the exploration of possible options for new processing
capabilities required to specifically process low-grade ore, so that there are
still no changes in facts and circumstances to be considered as at 30 June
2025.
During the six-month period ended 30 June 2025, a volume of 1,606 thousand (31
December 2024: 3,684 thousand; 30 June 2024: 3,003 thousand) tons of low-grade
ore in the amount of US$11,725 thousand (31 December 2024: US$36,317 thousand;
30 June 2024: US$29,821 thousand) was extracted and stockpiled, and directly
recognised in the interim condensed consolidated financial statements,
included in cost of sales, due to the uncertainties in respect of the expected
time of processing of the extracted and stockpiled volumes.
As disclosed in Note 2 Summary of material accounting policies and Note 19
Commitments, contingencies and legal disputes and, there is a risk that some
of the Group's inventories are seized or subject to a forced sales process, if
enforcement procedures in respect of an ongoing legal dispute commence.
Although the Group has recognised a provision for the full amount of the
contested sureties claim, there is a risk that the future net realisable value
of potentially seized finished goods subject to any potential seizure or
forced sales process is different than the value recognised at cost in the
interim condensed consolidated financial statements as at 30 June 2025.
Note 15: Prepayments and other current assets
As at 30 June 2025, total prepayments and other current assets included
prepayments to suppliers for goods and services in the amount of US$9,336
thousand (31 December 2024: US$12,648 thousand; 30 June 2024: US$21,972
thousand) and prepaid expenses totalling US$7,927 thousand (31 December 2024:
US$11,969 thousand; 30 June 2024: US$4,843 thousand).
The total balance of prepayments and other current assets as at 30 June 2025
include US$80 thousand (31 December 2024: US$93 thousand; 30 June 2024: US$699
thousand) made to related parties. The detailed related party disclosures are
made in Note 21 Related party disclosures.
Note 16: Cash and cash equivalents
As at 30 June 2025, cash and cash equivalents comprised:
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Cash at bank and on hand 52,262 105,919 115,131
Total cash and cash equivalents 3 52,262 105,919 115,131
The balance of cash and cash equivalents held in Ukraine amounts to US$2,424
thousand as at 30 June 2025 (31 December 2024: US$4,041 thousand; 30 June
2024: US$5,809 thousand). Despite the foreign exchange control measures
imposed under Martial Law in Ukraine (see Note 19 Commitments, contingencies
and legal disputes), this balance is fully available to the Group for its
operations in Ukraine and is therefore not considered to be restricted.
Note 17: Lease liabilities
With the exception of the lease liabilities shown below, the Group does not
have any outstanding interest-bearing loans and borrowings as at 30 June 2025
or as at the end of the comparative periods.
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Current
Lease liabilities 14 2,476 4,665 3,092
Total current lease liabilities 3 2,476 4,665 3,092
Non-current
Lease liabilities 14 241 419 528
Total non-current lease liabilities 3 241 419 528
Total lease liabilities 2,717 5,084 3,620
The table below shows the movements in the lease liabilities:
US$000 6 months ended Year ended 31.12.24 6 months ended
30.06.24
30.06.25
(unaudited) (audited) (unaudited)
Opening balance of lease liabilities 5,084 6,948 6,948
Cash movements
Principal and interest elements of lease payments (2,555) (5,755) (2,904)
Total cash movements (2,555) (5,755) (2,904)
Non-cash movements
Additions to lease liabilities 95 4,161 507
Others (incl. translation differences) 93 (270) (931)
Total non-cash movements 188 3,891 (424)
Closing balance of lease liabilities 2,717 5,084 3,620
During the period ended 30 June 2025 US$333 thousand was recognised as an
expense in the interim consolidated income statement in respect of short-term
leases with a corresponding impact on the net cash flows from operating
activities (31 December 2024: US$722 thousand; 30 June 2024: US$359 thousand).
Furthermore, interest expense on lease liabilities in the amount of US$62
thousand was recognised in the interim consolidated income statement during
the period ended 30 June 2025 (31 December 2024: US$191 thousand; 30 June
2024: US$106 thousand).
Lease related commitments for future contingent rental payments were
US$122,951 thousand as at 30 June 2025 (31 December 2024: US$112,780 thousand;
30 June 2024: US$103,603 thousand). These commitments include future cash
flows dependent on non-fixed rates related to the long-term portion of leases
of land not used for the direct extraction of ore and accounted for under IFRS
16 whereas the short-term portion is recognised as lease liability in the
interim consolidated statement of financial position.
The interest elements of lease payments are included in the cash flows from
operating activities and not in the cash flows used in financing activities.
For further information on commitments for the use of mining land, please see
Note 19 Commitments, contingencies and legal disputes and Note 11 Right-of-use
for further information on these assets. Further information on the Group's
exposure to interest rate, foreign currency and liquidity risk is provided in
Note 27 Financial instruments of the 2024 Annual Report & Accounts.
Note 18: Financial instruments
Fair values
Set out below are the carrying amounts of the Group's financial instruments
that are carried in the interim consolidated statement of financial position:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Financial assets
Cash and cash equivalents 52,262 105,919 115,131
Trade and other receivables 63,572 39,792 74,536
Other financial assets 5,091 5,215 5,231
Total financial assets 120,925 150,926 194,898
Financial liabilities
Trade and other payables 41,559 55,781 46,705
Accrued liabilities 14,038 18,539 14,391
Interest-bearing loans and borrowings 2,717 5,084 3,620
Total financial liabilities 58,314 79,404 64,716
Interest-bearing loans and borrowings
The fair values of interest-bearing loans and borrowings are based on the
discounted cash flows using market interest rates and are approximately equal
to their carrying amounts.
Other financial assets and liabilities
The fair values of cash and cash equivalents, trade and other receivables and
payables, other financial assets and accrued liabilities are approximately
equal to their carrying amounts due to their short maturity.
Credit risk
The change of the balance of impairment losses on trade receivables recognised
in these interim condensed consolidated income statements as of 30 June 2025
and during the comparative periods ended 31 December 2024 and 30 June 2025 was
not material and therefore not disclosed separately in the interim
consolidated income statement.
The Group, through its trading operations, enters into binding contracts,
which contain obligations that create exposure to credit, counterparty and
country risks. It is the primary objective of the Group to manage such risks
to reduce uncertainty of collection from buyers. A secondary objective is to
minimise the cost of reducing risks within acceptable parameters.
Credit risk is the risk associated with the possibility that a buyer will
default, by failing to make required payments in a timely manner or to comply
with other conditions of an obligation or agreement. Where appropriate, the
Group uses letters of credit to assist in mitigating such risks.
Counterparty risk crystallises when a party to an agreement defaults. Where
letters of credit are used to minimise this risk, the Group uses a confirming
bank with a similar or higher credit rating to mitigate country and/or credit
risk of the issuing bank.
Commodity risk
Revenues related to provisionally priced sales are initially recognised at the
estimated fair value of the consideration receivable based on the forward
price at each reporting date for the relevant period outlined in the different
contracts. Consequently, the receivable balance may change in a future period
when final invoices can be issued based on final iron ore prices to be applied
according to the specific underlying contract terms. The provisionally priced
iron ore exposure as at 30 June 2025 was 321,151 tonnes (31 December 2024:
573,291 tonnes; 30 June 2024: 327,595 tonnes) and gave rise to a fair value
loss relating to the embedded provisional pricing mechanism of US$710 thousand
as at 30 June 2025 (31 December 2024: US$1,065 thousand; 30 June 2024:
US$2,218 thousand). Final iron ore prices based on the relevant index are
normally known within 60 days after the reporting period. The difference
between the provisionally priced receivable balance recognised as at 30 June
2025 and the receivable balance taking into account known final and latest
forward prices is US$155 thousand and would have increased the consolidated
result and the shareholders' equity by this amount. (31 December 2024: US$760
thousand, would have decreased the consolidated result and the shareholders'
equity by this amount; 30 June 2024: US$163 thousand, would have decreased the
consolidated result and the shareholders' equity by this amount).
Where pricing terms deviate from the index-based pricing model, derivative
commodity contracts may be used to swap the pricing terms to the iron ore
index price.
Finished goods are held at cost without revaluation to a spot price for iron
ore pellets at the end of the reporting period, if the recoverable amount
exceeds the cost basis.
Note 19: Commitments, contingencies and legal disputes
Commitments
Commitments as at 30 June 2025 consisted of the following:
US$000 As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Total commitments for the lease of mining land (out of the scope of IFRS 16) 57,255 54,948 48,672
Total capital commitments on purchase of property, plant and equipment 116,262 115,190 127,245
Commitments for investment in a joint venture 6,000 6,064 6,064
Commitments for the lease of mining land
These commitments relate to the agreements for the use of mining land, which
fall out of the scope of IFRS 16 Leases.
For further information on lease-related commitments, see Note 11 Right-of-use
assets and Note 17 Lease liabilities.
Legal
In the ordinary course of business, the Group is subject to various legal
actions and ongoing court proceedings. There is a risk that the independence
of the judicial system and its immunity from economic and political influences
in Ukraine is not upheld, consequently Ukrainian legislation might be
inconsistently applied to resolve the same or similar disputes. See also the
Principal Risks section on pages 85 to 87 of the 2024 Annual Report &
Accounts for further information on the Ukraine country risk.
Critical judgements
The Group is exposed to the risks associated with operating in a dynamic and
adverse political landscape in Ukraine, which may or may not be exacerbated by
the war and/or the current circumstances facing Mr Zhevago (see Ukraine
country risk on pages 85 and 87 of the 2024 Annual Report & Accounts). As
a result, the Group's exposure to a number of risk areas is heightened
compared to those expected in a stable economy, such as an environment of
political, fiscal and legal uncertainties, which require a significant portion
of critical judgements to be made by management.
Critical judgements for ongoing legal proceedings and disputes with
corresponding provisions
Contested sureties claim
On 7 December 2022, Ferrexpo Poltava Mining ("FPM") received a claim in the
amount of UAH4,727 million (US$113,518 thousand as at 30 June 2025) in respect
of contested sureties.
The claimant alleges that it acquired rights under certain loan agreements
originally concluded between Bank F&C and various borrowers by entering
into an assignment agreement with the State Guarantee Fund on 6 November 2020.
The claimant further claims that FPM provided sureties to Bank F&C to
secure performance under these loan agreements.
The court of first instance in Ukraine made an award in favour of the claimant
on 9 August 2023, which was upheld by the court of appeal on 26 January 2024.
As at the date of the approval of these interim condensed consolidated
financial statements, the case is under review by the Supreme Court of
Ukraine. On 1 April 2024, the Supreme Court suspended the possible enforcement
of the decision of the court of appeal against FPM. Whilst several hearings
have already been held no substantive decision on the merits of the case has
yet been made by the Supreme Court. The last hearing took place on 16 June
2025 and the next hearing is scheduled for 8 September 2025. As at the date of
approval of these interim condensed consolidated financial statements, no
enforcement procedures have commenced and, based on independent legal advice
obtained, it is still management's position that such procedures cannot be
initiated by the claimant until a final decision is made by the Supreme Court,
or the suspension order is lifted. However, in connection with the ongoing
legal dispute over the contested guarantees, the Group has received
information that on 9 May 2025, the counterparty filed an application with the
Commercial Court in the Poltava region to initiate bankruptcy proceedings of
FPM. The court accepted this application for consideration and scheduled a
preparatory court hearing for 27 May 2025, which was rescheduled by the judge.
A hearing scheduled for 24 July 2025 was also postponed and a further hearing
is yet to be scheduled.
Notwithstanding the two negative court decisions of the lower courts in the
contested sureties claim, based on independent legal advice obtained,
management remains of the view that the contested sureties claim is without
merit and FPM has compelling arguments to continue to defend its position in
the Supreme Court. However, considering the magnitude of this claim and the
risks associated with the judicial system in Ukraine as further described
above, the full provision in the amount of UAH4,727 million (US$113,518
thousand as at 30 June 2025), which was recorded as at the end of the
financial year ended 31 December 2023, was not released as at 30 June 2025.
If the final ruling of the Supreme Court is not in FPM's favour of FPM, the
claimant may start the enforcement proceedings, including progressing the
bankruptcy proceedings application against FPM, which could have a material
negative impact on the Group's business activities and its ability to continue
as a going concern, as the assets of FPM could be seized or subjected to a
forced sale. The potential seizure or forced sale of FPM's assets, including
moveable, immovable and financial assets, may have a material adverse impact
on the Group's cash flow generation, profitability and available liquidity in
future periods.
As at the date of the approval of these interim condensed consolidated
financial statements, it is not reasonably possible to assess the implications
of a potential seizure or forced sale of assets or bankruptcy proceedings on
the Group's business activities, as the timing, scope and impact are unknown
and outside of the Group's control. However, the Group is considering and has
prepared a number of mitigating actions and responses within its control in
order to seek to ensure continuation of production and generation of revenue
streams. Beyond that, in case of an enforcement, FPM will challenge orders and
enforcement actions in the court where possible, in order to seek to allow the
Group to continue to trade and generate resources to meet its other
liabilities as they fall due. See Note 2 Summary of material accounting
policies, Note 10 Property, plant and equipment and Note 14 Inventories for
further information.
Critical judgements for ongoing legal proceedings and disputes without
corresponding provisions
Legal proceedings relating to Bank F&C
Shares freeze in relation to claim from the Ukrainian Deposit Guarantee Fund
("DGF")
On 3 March 2023, the court of first instance in Ukraine, while hearing the
dispute between the DGF and Mr Zhevago in relation to the liquidation of Bank
F&C in 2015 ("the main dispute"), ordered the arrest (freeze) of 50.3% of
Ferrexpo AG's ("FAG") shareholding in each of Ferrexpo Poltava Mining ("FPM"),
Ferrexpo Yeristovo Mining ("FYM") and Ferrexpo Belanovo Mining ("FBM"). In
addition to this arrest, the court order also contains a prohibition on
Fevamotinico S.a.r.l. disposing of its shares in Ferrexpo plc and Ferrexpo plc
disposing of any of its shares in FAG. As at the date of the approval of these
interim condensed consolidated financial statements, the Group has no
intention, and never has had any intention, of disposing of its shares in FPM,
FYM, FBM or FAG. The Group does not expect an impact on its operations because
of this court order.
The Group's subsidiaries affected by this court order, including FAG, have
filed appeals to remove the restrictions. The court of appeal dismissed the
appeals and the decision of the court of appeal was upheld by the Supreme
Court of Ukraine on 10 January 2024. Therefore, the restrictions remain
effective.
On 31 July 2024, the court of first instance agreed to commence economic
examination to be performed by an independent expert institution to assess the
amount of damages of Bank F&C in the main dispute. The proceedings in the
main dispute are still suspended until an expert opinion is received.
Based on advice from Ukrainian legal counsel, management considers that the
court order dated 3 March 2023 to arrest (freeze) 50.3% of FAG's shareholding
in each of FPM, FYM and FBM contravened Ukrainian law because that 50.3%
shareholding is the property of FAG and not of any other person as a matter of
Ukrainian law.
Shares freeze in relation to claim from the National Bank of Ukraine ("NBU")
In addition to the case initiated by the Ukrainian Deposit Guarantee Fund
("DGF") as described above, there is a commercial litigation in Ukraine
between the NBU and Mr Zhevago in relation to a personal surety given by Mr
Zhevago for a loan provided by the NBU to Bank F&C prior to Bank F&C's
insolvency.
In the context of this commercial litigation, in September 2023 the Chief
State Bailiff of the Ministry of Justice of Ukraine ("State Bailiff") issued a
resolution to arrest (freeze) property of Mr Zhevago. This was stated to
include 50.3% of the issued share capital of Ferrexpo Yeristovo Mining ("FYM")
and of Ferrexpo Belanovo Mining ("FBM"), which are owned by Ferrexpo AG
("FAG"). Such decision was made based on the incorrect assumption that these
corporate rights are owned by Mr Zhevago.
In October 2023, FAG filed a civil claim seeking to cancel the arrest order in
relation to FAG's shares in FYM and FBM and amotion to block the enforcement
procedure initiated by the State Bailiff in relation to a potential sale of
shares.
On 30 November 2023, the court of first instance in Ukraine granted FAG's
motion and suspended the enforcement procedure, prohibiting the State Bailiff
from taking any further actions to forcibly sell FAG's corporate rights in FYM
and FBM (the "interim measures"). On 1 July 2024, the court of appeal lifted
the interim measures. As a result, the State Bailiff may proceed with the
sale. FAG subsequently filed an appeal to the Supreme Court, and on 8 August
2024, the Supreme Court opened the review of the case. In parallel, the court
of first instance was considering FAG's claim to cancel the arrest order.
After several hearings of the court of first instance in 2025, the judge
closed the proceedings during a hearing on 28 May 2025 and FAG subsequently
filed an appeal. On 4 July 2025, the court of appeal opened the review of the
case. The next hearing is scheduled for 23 September 2025.
In addition, in August 2024 the Group became aware that the Department of
State Enforcement Service of the Ministry of Justice of Ukraine (the "State
Enforcement Service") had issued a resolution arresting certain corporate
rights relating to 49.3% of shares in Ferrexpo Poltava Mining ("FPM") held by
FAG. On 15 August 2024, FAG filed a claim to remove this arrest. Initially,
the court of first instance refused to open the case, but this decision was
overturned on 5 February 2025 following a successful appeal by FAG to the
court of appeal. The NBU subsequently filed an appeal to the Supreme Court of
Ukraine, which was rejected by the Supreme Court. A hearing at the Pecherskyi
District Court scheduled for 23 July 2025 did not take place and the next
hearing is scheduled for 14 October 2025.
On 17 September 2024, a new arrest of the same 49.3% of shares in FPM was
imposed by the State Enforcement Service. On 16 October 2024, FAG filed a
claim to lift the new arrest. On 23 October 2024, the court of first instance
refused to open the case, but this decision was also overturned on 16 January
2025 following a successful appeal by FAG to the court of appeal. The NBU
subsequently filed an appeal to the Supreme Court, which was rejected by the
Supreme Court on 19 March 2025. As a result, the decision of the court of
appeal remains in force and the case was returned to the Pecherskyi District
Court. The first court hearing took place on 16 June 2025 and on 19 June 2025
this case was merged with the first case mentioned above.
If the above enforcement processes are not interrupted, this could ultimately
lead to a potential sale of shares representing 50.3% of the issued shares in
each of FYM and FBM and 49.3% of the issued shares in FPM.
Shares freeze in relation to investigation in connection with Bank F&C
On 25 March 2024, the Group became aware of a court order dated 18 January
2024 regarding further restrictions on certain corporate rights concerning all
of the Group's Ukrainian subsidiaries. According to the January 2024 court
order these restrictions were imposed in September 2023 on 49.5% of the shares
in all of the Group's Ukrainian subsidiaries, except for Nova Logistics LLC
and TIS-Ruda LLC, an associated company of the Group, where the relevant
percentages restricted are 25.2% and 24.7%, respectively. The Group
understands the restrictions have been imposed in connection with ongoing
court actions relating to Bank F&C.
The restrictions do not affect ownership of the relevant shares, but prohibit
their transfer and restrict the right to exercise corporate rights otherwise
attaching to such shares, including the right to vote. On 21 May 2024,
Ferrexpo AG ("FAG") filed an appeal against the court order. On 30 January
2025, the court of appeal rejected FAG's appeal.
On 4 March 2025, the State Bureau of Investigation in Ukraine ("SBI") made a
media statement that the Pecherskyi District Court of Kyiv has granted a
request of the Prosecutor General's Office of Ukraine to transfer 49.5% of the
corporate rights in Ferrexpo Poltava Mining ("FPM") held by "FAG" to Ukraine's
Asset Recovery and Management Agency ("ARMA"). The statement also makes
reference to the transfer to ARMA of corporate rights in a further 15
undisclosed legal entities. The SBI statement notes that the transfer of the
corporate rights in FPM was in connection with on-going legal cases in Ukraine
relating to the alleged embezzlement of funds from Bank F&C.
On 30 April 2025, ARMA announced the commencement of market consultations for
the appointment of asset managers in respect of corporate rights and assets
potentially to be transferred to ARMA. The applicants for asset managers were
expected to submit their applications by 30 May 2025.
As at the date of the approval of these interim condensed consolidated
financial statements, no member of the Ferrexpo Group has received any
official documents or requests from the Ukrainian authorities with regards to
the decision of the Pecherskyi District Court of Kyiv and has not seen a copy
of the court decision. The details of the court decision are therefore unclear
at this stage and the Group is working with its independent legal advisors to
further understand the situation.
Based on independent legal advice from Ukrainian counsel, management
understands that FAG remains the 100% owner of FPM. If ARMA does appoint a
third party manager to manage 49.5% of the corporate rights in FPM, according
to current Ukrainian legislation, that manager would need to obtain consent
from FAG for any corporate actions. Based on article 21 of the Law on ARMA,
the manager is obliged to coordinate with the owner of those shares (i.e. FAG)
regarding the exercise of their management powers in respect of voting at any
shareholder meetings. This rule means that the manager cannot vote at the
shareholders meeting on its own, but only with the consent of the owner, FAG.
As a result, no non-controlling interest has been recognised as of 30 June
2025 in respect of this dispute.
Currency control measures imposed in Ukraine
With the start of the Russian invasion of Ukraine on 24 February 2022, the
Ukrainian government introduced Martial Law affecting, among other things,
matters relating to lending agreements, foreign exchange and currency controls
and banking activities.
As a result, the National Bank of Ukraine ("NBU") has introduced significant
currency and capital control restrictions in Ukraine. These measures are
affecting the Group in terms of its cross-border payments, which are
restricted and may be made only in exceptional cases. The maximum period for
settlement of invoices under export and import contracts was decreased as of 1
April 2022 from what was previously 360 days to 180 days.
Despite the partial relaxation of Ukrainian hryvnia controls in May 2024
around the regulatory framework specific to foreign currency transactions,
intercompany settlements and transfers offshore for international Groups, the
NBU maintains tight capital controls in Ukraine. These measures put additional
pressure on the Group's liquidity management as the Ukrainian subsidiaries are
currently not in a position to make significant cash transfers outside of
Ukraine. As it is essential to the Group that sufficient liquidity is held
outside of Ukraine to ensure that the Group's liabilities can be settled when
falling due, intercompany receivable balances due to the Ukrainian
subsidiaries have historically only been paid when falling due and after
considering the local cash requirements for operating activities and capital
expenditure programmes.
The lower operating activities and reduced capital expenditure programmes due
to the ongoing war and absence of VAT refunds have reduced the local cash
requirements and consequently increased the imbalance between payments to be
made into Ukraine and local cash requirements. As a result of the imposed
currency control measures, the Group has to carefully manage the payments to
be made into Ukraine, as the local subsidiaries cannot transfer any surplus
funds back to Group entities outside of Ukraine if required.
Failure to comply with the currency control regulations can result in fines of
0.3% per day calculated on the cumulative overdue receivable balances. The
Group has implemented various measures to mitigate the impact of the currency
control regulations and reduce the risk of material fines, but there exists
legal uncertainty in the application of the currency control regulations
during the application of Martial Law in Ukraine. The currency control
regulations may also be subject to change in the future (including with
retrospective effect). Therefore, there is a risk that the Group may become
subject to challenges from regulatory authorities in connection with the
application of these regulations.
Given the amount of outstanding receivable balances between Group companies,
there is a risk of material fines becoming payable in the future. However,
because of different interpretations of the currency control regulations
during the application of Martial Law and the measures initiated by the Group
to mitigate the risk of potential fines, it is currently not possible to
reliably estimate the amount of a potential exposure.
Share dispute
In 2020, the Kyiv Commercial Court reopened court proceedings in relation to
an old shareholder litigation.
This old shareholder litigation started in 2005, when a former shareholder in
Ferrexpo Poltava Mining ("FPM") brought proceedings in the Ukrainian courts
seeking to invalidate a share sale and purchase agreement concluded in 2002
pursuant to which a 40.19% stake in FPM was sold to nominee companies that
were previously ultimately controlled by Mr Zhevago, amongst other parties
(the "2002 SPA"). After a long period of litigation, all old claims were fully
dismissed in 2015 by the Higher Commercial Court of Ukraine.
In January and February 2021, further claims were filed by former shareholders
in FPM seeking to invalidate the 2002 SPA. Those claims were similar to the
previous claims made in 2005. In May 2021, the Kyiv Commercial Court ruled in
favour of Ferrexpo AG ("FAG") but this decision was subsequently overturned by
the court of appeal which ruled in favour of the claimants. On 19 April 2023,
the Grand Chamber of the Supreme Court ruled in favour of FAG.
In May 2023, the National-Anti-Corruption Bureau of Ukraine ("NABU") and the
Specialised Anti-Corruption Prosecutor's Office ("SAPO") accused the Head of
the Supreme Court of bribery. These allegations made reference to the ruling
made by the Supreme Court on 19 April 2023 and Mr Zhevago. Investigations by
NABU and SAPO are underway into the conduct of the former Head of the Supreme
Court and a lawyer who allegedly acted as an intermediary in the alleged
bribery. On 3 August 2023, NABU announced that Mr Zhevago had been issued with
a notice of suspicion in NABU's and SAPO's investigation. If the Ukrainian
Anti-Corruption Court concludes that a judge received a bribe for the
favourable decision in the share dispute case, and such verdict of the
Anti-Corruption Court remains valid after any potential appeal, then the
claimants in the share dispute case may apply to the Supreme Court to review
the ruling made by the Supreme Court on 19 April 2023. In February 2024, all
four claimants were dissolved according to the records at the UK Companies
House. Im September 2024, the High Court of Justice made order for restoration
to the register and winding up of these companies. As at the date of the
approval of these interim condensed consolidated financial statements, no
allegations have been made against the Group in connection with the alleged
bribery and it is currently not possible to anticipate future developments in
this case with any certainty.
If the share dispute case were to be reviewed by the Grand Chamber of the
Supreme Court once again, based on advice from Ukrainian legal counsel,
management remains of the view that FAG has compelling legal arguments to
defend its position. However, more general concerns surrounding the
independence of the judicial system and its immunity from economic and
political influences in Ukraine means there remains a residual risk of a
negative outcome.
A hypothetical reversal of the 19 April 2023 decision by the Grand Chamber of
the Supreme Court would result in the loss of a significant proportion of the
shareholding in the Group's main operating subsidiary in Ukraine, which holds
approximately 65% of the Group's non-current operating assets, and would have
a material adverse impact on the shareholders' equity attributable to the
shareholders of Ferrexpo plc. Due to the various uncertainties, it is
currently not possible to reliably estimate the financial impact, but it could
be material. A negative decision could also have an impact on potential future
dividends from FPM to FAG and, as a result, on the distributable reserves of
Ferrexpo plc.
See Note 9 Earnings per share and dividends paid and proposed for further
details.
No non-controlling interest has been recognised as of 30 June 2025 in respect
of this dispute because FPM remains wholly owned by FAG as at the date of the
approval of these interim condensed consolidated financial statements. It is
management's view that a hypothetical reversal of the decision by the Grand
Chamber of the Supreme Court will not cast significant doubt on the Group's
ability to continue as a going concern. However, such a decision might
complicate the daily business of the Group's major subsidiary in Ukraine.
Other ongoing legal proceedings and disputes
Other ongoing legal proceedings and disputes with corresponding provisions
Challenge of squeeze-out of minority shareholders
Following the completion of squeeze-out procedures in 2019 in respect of
Ferrexpo Poltava Mining ("FPM"), two former minority shareholders of FPM
challenged the valuation of the shares of FPM. This valuation formed the basis
for a mandatory buy-out of minority shareholders according to Ukrainian law.
On 19 September 2023, a court of first instance ruled in favour of the two
former minority shareholders and decided that FPM should pay UAH136 million
(US$3,266 thousand as at 30 June 2025) in aggregate to the claimants. The
court of appeal upheld the decision of the court of first instance. Following
the filing of an appeal by FPM, the Supreme Court cancelled both decisions and
referred the case back to the court of first instance for a new hearing.
On 15 November 2024, the court of first instance suspended proceedings. After
FPM's initial appeal of this decision to suspend was rejected, FPM filed an
appeal to the Supreme Court. On 27 January 2025, the Supreme Court commenced
its review of this matter and rejected FPM's cassation appeal on 25 February
2025. As a result, the case was heard again by the Poltava Commercial Court,
which ruled on 10 April 2025 that an amount of UAH136 million (US$3,266
thousand as at 30 June 2025) should be paid to the two former minority
shareholders. FPM subsequently filed an appeal and the court of appeal
considered the appeal on procedural issues on 19 May 2025. On 20 July 2025, a
hearing on procedural issues took place and the court of appeal rejected the
Group's claims. The next hearing on the merits took place on 21 July 2025 and
the date of the next hearing is scheduled for 4 September 2025.
In accordance with the requirements of IAS 37 Provisions, contingent
liabilities and contingent assets, the Group recorded a full provision for the
compensation claimed as at the end of the financial year ended 31 December
2023, which provision remained unchanged as at 30 June 2025 in Ukrainian
hryvnia terms.
Other ongoing legal proceedings and disputes without corresponding provisions
Royalty-related investigation and claim
On 8 February 2022, Ferrexpo Poltava Mining ("FPM") received a tax audit
report, which claims the underpayment of iron ore royalty payments during the
period April 2017 to June 2021 in the amount of approximately UAH1,042 million
(US$25,023 thousand as at 30 June 2025), excluding fines and penalties. The
Group objected to the claims made in the tax audit report. On 11 August 2023,
FPM received a tax notification decision, which claims the underpayment of
royalty payments in the amount of UAH1,233 million (US$29,610 thousand as at
30 June 2025), which is higher than the amount initially stated in the tax
audit report due to imposed fines and penalties. FPM challenged this
notification decision with the tax authorities. On 20 October 2023, the tax
authorities decided that the amount in the notification decision is final and
not subject to change. In November 2023, FPM filed a lawsuit to challenge the
tax authorities' decision. On 15 April 2024, the court suspended the
proceedings pending the review of another case concerning the challenge of an
individual tax consultation issued by the tax authority in another matter
which is connected with royalty proceedings.
On 3 February 2022, FPM and Ferrexpo Yeristovo Mining ("FYM") were notified by
the Office of Prosecutor General of an ongoing investigation regarding alleged
underpayments of iron ore royalties during the years 2018 to 2021. On 16
November 2022, officials from the Bureau of Economic Security of Ukraine
conducted searches at FPM and FYM, and further searches were carried out on 1
February 2023. On 3 February 2023, a notice of suspicion was delivered to a
senior manager of FPM, which claimed underpayment of royalty payments in the
amount of approximately UAH2,000 million (US$48,030 thousand as at 30 June
2025). Bail of UAH20 million (US$547 thousand as at date of the payment) was
approved by the court on 9 February 2023. Although the Group had no obligation
to do so, the bail amount was subsequently paid by the Group.
On 6 February 2023, the court arrested the bank accounts of FPM. Following a
motion to change the scope of the arrest filed by FPM, the court on 8 February
2023 and on 16 February 2023 added exceptions to the original arrest order to
allow FPM to make payments for salaries, local taxes, social security charges,
payments for utilities as well as payments to state and municipal companies.
FPM's appeal to cancel the arrest of the bank accounts was not granted.
On 31 October 2023, a notice of suspicion was delivered to another senior
manager of FPM. On 13 November 2023, a court of first instance approved the
bail in the amount of approximately UAH800 million (US$21,993 thousand as at
that date) which was reduced by the court of appeal to UAH650 million
(US$15,610 thousand as at 30 June 2025). Although the Group had no obligation
to do so, the Group subsequently made a partial payment of the bail in the
amount of UAH50 million (US$1,259 thousand as at date of the payment) and the
case was transferred to a local court.
On 26 November 2024, the court cancelled the arrest of FPM's bank accounts at
one of its Ukrainian banks. The last court hearing took place on 16 June 2025,
and the next hearing is scheduled for 7 August 2025.
Based on independent legal advice obtained, it is management's view that FPM
and FYM have compelling arguments to defend their positions in court and, as a
consequence, no associated liabilities have been recognised in relation to the
royalty claims in the interim condensed consolidated statement of financial
position as at 30 June 2025. However, as with other ongoing legal proceedings,
more general concerns surrounding the independence of the judicial system and
its immunity from economic and political influences in Ukraine means there
remains a residual risk of a negative outcome.
Investigations on use of waste product and asset freeze
On 10 January 2023, the State Bureau of Investigations ("SBI") in Ukraine
conducted several searches in respect of investigations on alleged illegal
extraction of minerals ("rubble"). The National Police of Ukraine also carried
out investigations on the same matter and searched and collected samples of
the rubble on 17 January 2023 at Ferrexpo Poltava Mining ("FPM").
FPM's position is that it has complied with the relevant legislation in
respect of its mining license. The minerals in question were not a separate
mineral resource, but rather a waste product resulting from the crushing of
iron ore during the technical process for the production of iron ore pellets.
Sales of the rubble by FPM were subject to inspection by the State Service for
Geology and Subsoil of Ukraine for many years and in any event sales were
suspended by the Group in September 2021 when the State Service for Geology
and Subsoil of Ukraine requested to suspend the sales.
On 29 June 2023, the SBI issued notices of suspicion to three representatives
of FPM's senior management and the head of one division for allegedly selling
the rubble without the appropriate permit. These FPM employees were detained
by the SBI and subsequently released after FPM paid bails totalling UAH122
million (US$3,336 thousand as at date of the payment).
On 22 September 2023, the National Police of Ukraine searched the private
residence of a senior manager of FPM and issued a further notice of suspicion.
The senior manager was detained by the National Police of Ukraine and released
following payment of bail by the Group in the amount of UAH400 million
(US$11,063 thousand as at date of the payment).
In the pre-trial investigation of the rubble case and following an application
from the prosecutor to arrest ("freeze") all rail cars and railway access
tracks owned by FPM, a court of first instance in Ukraine issued an order to
freeze the rail cars and the railway access tracks. FPM filed an appeal and at
a hearing of the court of appeal on 30 October 2023 the arrest of assets was
upheld. However, the court of appeal refused to clarify the exact scope of the
order which was interpreted as a restriction on the use of one type of FPM's
rail cars. On 22 April 2024, the court of first instance cancelled the
prohibition the use of rail cars and the railway access tracks, thereby
permitting FPM to continue using rail cars (of any type) and railway access
tracks.
In the same pre-trial investigation, some of the real estate assets and
transport vehicles of FPM were also arrested, but this arrest does not
restrict the use of these assets in FPM's operations.
On 5 March 2024, FPM's bank accounts were arrested by the National Police of
Ukraine with exemptions allowing FPM to pay salaries, local taxes, social
security charges, payments for utilities as well as payments to state and
municipal companies. FPM's appeal against the arrest of the bank accounts was
rejected by the court of appeal.
On 29 April 2024, a court placed a restriction on the sale of the mining
license of FPM. This restriction does not affect the use of the mining license
and FPM continues its mining operations as planned. FPM's appeal against the
restriction on the sale of the mining license was rejected by the court of
appeal.
On 15 January 2025, the Office of the Prosecutor General announced that the
National Police of Ukraine had completed the pre-trial investigation and the
case was sent to a court of the first instance. On 4 February 2025, FPM
received information that a civil claim was filed seeking joint liability of
FPM and its General Director for damages amounting to UAH157 billion (US$3.8
billion as at 30 June 2025) in favour of the Ukrainian state. This claim was
initially based on an allegation that FPM and the General Director
participated in the illegal sale of waste products. This has since evolved
into allegations that FPM is illegally mining and selling subsoil (minerals
other than iron ore), which is said to have caused damage to the environment.
FPM rejects these allegations in their entirety on the basis that there was no
illegal extraction of the subsoil. FPM mines and extracts iron ore according
to its mining license and provides for the removal of rock and its storage as
waste.
During a hearing on 16 June 2025 in two separate rubble cases, the judge
considered merging these cases with the royalty case, but decided against such
mergers. The initiated by the National Police of Ukraine was transferred to a
new judge to consider from the beginning. First preparatory meetings took
place on 7 July 2025. In terms of the criminal case initiated by the SBI, this
case was also transferred to a new judge to consider from the beginning. The
preparatory court hearing took place on 1 July 2025 and the next one is
scheduled for 24 September 2025. Based on independent legal advice from
Ukrainian counsel, management understands both the trials in the court of
first instance may last several years.
As at the date of approval of these interim condensed consolidated financial
statements, the claim received does not constitute a legal obligation to pay
according to the local legislation. Further, even if a court in Ukraine were
to conclude that FPM has caused a damage to the environment, the quantum of
this claim, which is wholly disproportionate, has not been explained. In the
circumstances, it is management's position that no reliable estimate of the
potential future outflow, or assessment of the merits, can be made as at the
date of approval of these interim condensed consolidated financial statements.
As a consequence, no provision was recorded as at 30 June 2025 in accordance
with IAS 37 Provisions, contingent liabilities and contingent assets. See Note
2 Summary of material accounting policies for potential impacts on the Group's
ability to continue as going concern.
Ecological claims
As described in detail in the 2022 Annual Report & Accounts, the State
Ecological Inspection carried out an inspection of Ferrexpo Yeristovo Mining
("FYM") and on 1 October 2021 issued an order to remove a number of alleged
violations of environmental rules. After the court of first instance ruled in
favour of FYM on 19 July 2022, the State Ecological Inspection filed an
appeal. The court of appeal returned the appeal claim to the State Ecological
Inspection on 20 March 2023 due to procedural errors when filing the claim and
the State Ecological Inspection subsequently requested an extension of the
deadline for the filing of their next appeal. The State Ecological Inspection
subsequently filed another appeal and on 20 July 2023 the court of appeal
returned the appeal claim to the State Ecological Inspection. There had been
no developments in respect of this dispute until 5 October 2023, when the
National Police of Ukraine reviewed land plots of FYM. On 5 November 2024, a
court authorised a review of FYM's land plots and new investigations.
There have been no further developments since then and it is not possible at
present to anticipate future developments in this case.
Based on independent legal advice obtained, it is management's view that FYM
has compelling arguments to defend its position in the court and, as a
consequence, no associated liabilities have been recognised in relation to
these matters in the consolidated statement of financial position as at 30
June 2025.
Cancellation of licence for Galeschynske deposit
On 24 June 2021, an Order of the President of Ukraine was published on the
official website of the President (the "Order"), which enacted the Decision of
the National Security and Defence Council of Ukraine on the application of
personal special economic and other restrictive measures and sanctions (the
"Decision"). Ferrexpo Belanovo Mining ("FBM") is included in the list of legal
entities which are subject to sanctions pursuant to the Decision. The Order
and the Decision do not provide any legal ground for the application of
sanctions. The sanction imposed on FBM is the cancellation of the mining
license for the Galeschynske deposit, which is one of two licenses held by
FBM.
On 15 November 2021, FBM filed a lawsuit with the Supreme Court of Ukraine
partially to annul the Order. On 28 November 2024, the appeal was filed and
the Grand Chamber of the Supreme Court subsequently opened the proceedings.
Based on information available on the website of the Supreme Court, the Grand
Chamber of the Supreme Court rejected FBM's appeal on 28 January 2025 and FBM
filed a claim to the European Court on Human Rights in May 2025.
The Galeschynske deposit is a project in the exploration phase that is
situated to the north of the Group's active mining operations. Following the
cancellation of this license, all capitalised costs associated with this
license totalling US$3,439 thousand, were written off in the financial year
2021.
Litigations regarding suspension of VAT refunds
In March 2025, Ferrexpo Poltava Mining ("FPM") and Ferrexpo Yeristovo Mining
("FYM") received notifications from the Ukrainian tax authorities of a
decision to suspend the VAT refunds for the month of January 2025, expected to
be refunded in March 2025. Similar notifications have been received in April,
May and June for the VAT refunds for the months of February, March and April
2025, respectively.
FPM and FYM provided objections to the State Tax Service of Ukraine (the
"STS"), which refused to agree with these objections in April and started
additional audit procedures. These additional audits and the suspension of the
VAT refunds for the month of January 2025 are currently challenged by FPM and
FYM in the court.
In May and July 2025, FPM and FYM filed additional lawsuits to the court in
relation to the suspended VAT refunds for the months of February and March
2025. It is expected that VAT refunds will resume only once the personal
sanctions imposed on Mr Zhevago have been lifted or when positive decisions
from the relevant courts in Ukraine have been received. As at 30 June 2025,
VAT refunds in the aggregate amount of UAH1,299,057 thousand (US$31,197
thousand at this date) were suspended by the STS, which were expected to be
refunded between March and June 2025. It is further expected that outstanding
VAT balance will further increase in the second half of 2025 and that FPM and
FYM will have to file further claims for any potentially suspended VAT
refunds. The absence of VAT refunds does have a material impact on the Group's
cash flow generation and available liquidity and, as a consequence, on the
Group's ability to continue as a going concern. See Note 2 Summary of material
accounting policies for further details.
Taxation
Tax legislation
As disclosed in Note 8 Taxation, following the completion of tax audits in
respect of its cross-border transactions, the Group's major subsidiaries,
Ferrexpo Poltava Mining ("FPM") and Ferrexpo Yeristovo Mining ("FYM"),
received tax claims in the amount of UAH2,162 million (US$51,920 thousand as
30 June 2025), including fines and penalties, and UAH259 million (US$6,220
thousand as at 30 June 2025), excluding potential fines and penalties,
respectively. The Group's subsidiaries filed objections to be considered by
the tax authorities, although these were rejected. Subsequently, the Group's
subsidiaries filed claims with the courts. As at the date of the approval of
these interim condensed consolidated financial statements, the hearings on the
merits before the court of first instance are still ongoing. As a consequence,
no specific provisions have been recorded as at 30 June 2025, either for the
claims received or for any subsequent years. If FPM and FYM are ultimately
unsuccessful, the tax claims may be material, although it is not possible at
present to reliably quantify the potential exposure. An unfavourable outcome
would have an adverse impact on the Group's cash flow generation,
profitability and liquidity. See Note 8 Taxation and also the Ukraine country
risk on pages 85 and 87 of the 2024 Annual Report & Accounts.
Note 20: Share capital and reserves
The share capital of Ferrexpo plc at 30 June 2025 was 613,967,956 (31 December
2024: 613,967,956; 30 June 2024: 613,967,956) Ordinary Shares at par value of
£0.10 paid for cash, resulting in share capital of US$121,628 thousand, which
is unchanged since the Group's Initial Public Offering in June 2007.
This balance includes 15,830,814 treasury shares (31 December 2024: 15,830,814
shares; 30 June 2024: 15,830,814 shares), originating from a share buyback
undertaken in September 2008 of 25,343,814 shares for a total cost of
US$77,260 thousand. In March 2023, the Group transferred 9,513,000 shares
valued at US$13,347 thousand from the treasury shares reserve to the Group's
employee benefit trust reserve, resulting in the reported balance.
The Group holds 9,741,183 shares in the employee benefit trust reserve (31
December 2024: 9,766,759 shares; 30 June 2024: 9,801,643 shares).
The translation reserve includes the effect from the exchange differences
arising on translation of non-US dollar functional currency operations (mainly
in Ukrainian hryvnia). The exchange differences arising from the translation
of the Group's foreign operations are initially recognised in the other
comprehensive income. See also the interim consolidated statement of
comprehensive income of these financial statements for further details.
As at 30 June 2025 other reserves attributable to equity shareholders of
Ferrexpo plc comprised:
For the financial year 2024 and the 6 months ended 30.06.25
US$000 Uniting of interest reserve Treasury share reserve Employee benefit trust reserve Translation reserve Total other
reserves
At 1 January 2024 (audited) 31,780 (48,260) (16,224) (2,643,590) (2,676,294)
Foreign currency translation differences - - - (136,902) (136,902)
Tax effect - - - 3,972 3,972
Total comprehensive loss for the year - - - (132,930) (132,930)
Share based payments - - 320 - 320
At 31 December 2024 (audited) 31,780 (48,260) (15,904) (2,776,520) (2,808,904)
Foreign currency translation differences - - - 12,133 12,133
Tax effect - - - (371) (371)
Total comprehensive income for the period - - - 11,762 11,762
Share based payments - - 274 - 274
At 30 June 2025 (unaudited) 31,780 (48,260) (15,630) (2,764,758) (2,796,868)
For the 6 months ended 30.06.24
US$000 Uniting of interest reserve Treasury share reserve Employee benefit trust reserve Translation reserve Total other
reserves
At 1 January 2024 (audited) 31,780 (48,260) (16,224) (2,643,590) (2,676,294)
Foreign currency translation differences - - - (91,167) (91,167)
Tax effect - - - 3,403 3,403
Total comprehensive income for the period - - - (87,764) (87,764)
Share based payments - - 113 - 113
At 30 June 2024 (unaudited) 31,780 (48,260) (16,111) (2,731,354) (2,763,945)
Note 21: Related party disclosures
During the periods presented, the Group entered into arm's length transactions
with entities under the common control of Mr Zhevago, with associated
companies and with other related parties. Management considers that the Group
has appropriate procedures in place to identify, control, properly disclose
and obtain independent confirmation, when relevant, for transactions with the
related parties.
Entities under common control are those under the control of Mr Zhevago.
Associated companies refer to TIS Ruda LLC, in which the Group holds an
interest of 49.9% (31 December 2024: 49.9%; 30 June 2024; 49.9%). This is the
only associated company of the Group.
All related party transactions entered into by the Group during the periods
presented are summarised in the tables on the following pages, except for
those made to the Non-executive Directors and Executive Directors of Ferrexpo
plc.
The payments made to the Non-executive Directors and Executive Directors in
the comparative period ended 31 December 2024 are disclosed in detail in the
Remuneration Report included in the Group's 2024 Annual Report & Accounts.
During the previous financial year ended 31 December 2024, the Group entered
into a settlement agreement with Mr Zhevago relating to amounts potentially
owing to Mr Zhevago under his CEO contract. Under this agreement, Mr Zhevago
has agreed to fully set-off the cost of the accommodation paid for by the
Group on his behalf against the sum potentially owed by the Group to him under
the settlement agreement for the CEO contract, without any money being
transferred between the parties involved. Further details are provided in Note
34 Related party disclosures included in the Group's 2024 Annual Report &
Accounts.
Revenue, expenses, finance income and finance expenses
6 months ended 30.06.25 (unaudited) 6 months ended 30.06.24 Year ended 31.12.24
(unaudited) (audited)
US$000 Entities under common control Asso- Other related parties Entities under common control Asso- Other related parties Entities Asso- Other related parties
ciated compa- nies ciated compa- under ciated compa-
nies common control nies
Other sales (a) 144 - - 157 - - 302 - -
Total related party transactions within revenue 144 - - 157 - - 302 - -
Materials and services (b) 3,861 - - 3,791 - - 7,943 - -
Spare parts and consumables (c) 967 - - 1,413 - - 3,151 - -
Total related party transactions within cost of sales 4,828 - - 5,204 - - 11,094 - -
Selling and distribution expenses (e) 2,058 4,698 - 2,838 6,584 - 5,683 11,950 -
General and administration expenses (f) 52 - 346 60 - 362 121 - 844
Other operating expenses(g) 126 - - 101 5 - 203 11 -
Finance expense - - - 1 - - 1 - -
Total related party transactions within expenses 7,064 4,698 346 8,204 6,589 362 17,102 11,961 844
Total related party transactions 7,208 4,698 346 8,361 6,589 362 17,404 11,961 844
The Group entered into various related party transactions. A description of
the most material transactions, which are in aggregate over US$200 thousand
(on an expected annualised basis) in the current or comparative periods is
given below. All transactions were carried out on an arm's length basis in the
normal course of business.
Entities under common control
a Sales of scrap metal to OJSC Uzhgorodsky Turbogas totalling US$81
thousand (30 June 2024: US$100 thousand; 31 December 2024: US$186 thousand).
b Purchases of oxygen, scrap metal and services from Kislorod PCC for
US$451 thousand (30 June 2024: US$529 thousand; 31 December 2024: US$1,048
thousand). See Note 19 Commitments, contingencies for further details
regarding the application to open bankruptcy proceedings ("creditor protection
proceedings") against Ferrexpo Poltava Mining ("FPM") filed by the related
party;
b Purchases of cast iron balls from OJSC Uzhgorodsky Turbogas for US$2,817
thousand (30 June 2024: US$2,521 thousand; 31 December 2024: US$5,506
thousand); and
b Purchase of maintenance and construction services from FZ Solutions LLC
for US$570 thousand (30 June 2024: US$676 thousand; 31 December 2024: US$1,257
thousand).
c Purchases of spare parts from CJSC Kyiv Shipbuilding and Ship Repair
Plant ("KSRSSZ") in the amount of US$83 thousand (30 June 2024: US$64
thousand; 31 December 2024: US$210 thousand);
c Purchases of spare parts from FZ Solutions LLC in the amount of US$13
thousand (30 June 2024: US$254 thousand; 31 December 2024: US$469 thousand);
c Purchases of spare parts from Kislorod PCC in the amount of US$130
thousand (30 June 2024: US$170 thousand; 31 December 2024: US$329 thousand).
See Note 19 Commitments, contingencies for further details regarding the
application to open bankruptcy proceedings ("creditor protection proceedings")
against Ferrexpo Poltava Mining ("FPM") filed by the related party;
c Purchases of spare parts from OJSC Uzhgorodsky Turbogas in the amount of
US$475 thousand (30 June 2024: US$625 thousand; 31 December 2024: US$1,153
thousand); and
c Purchases of spare parts from Valsa GTV in the amount of US$263 thousand
(30 June 2024: US$300 thousand; 31 December 2024: US$982 thousand).
e Purchases of advertisement, marketing and general public relations
services from FC Vorskla of US$2,057 thousand (30 June 2024: US$2,837
thousand; 31 December 2024: US$5,681 thousand).
g Purchase of marketing services from TV & Radio Company of US$123
thousand (30 June 2024: US$100 thousand; 31 December 2024: US$201 thousand).
Associated companies
e Purchases of logistics services in the amount of US$4,698 thousand (30
June 2024: US$6,584 thousand; 31 December 2024: US$11,950 thousand) relating
to port services, including port charges, handling costs, agent commissions
and storage costs, provided by TIS Ruda LLC. The scope and the volume of the
services procured from TIS Ruda LLC is impacted by the volume of the Group's
seaborne sales through the port of Pivdennyi, which depends on the margins to
be expected in the various markets.
Other related parties
f Legal and administrative services in the amount of US$254 thousand (30
June 2024: US$268 thousand; 31 December 2024: US$657 thousand) provided by
Kuoni Attorneys at Law Ltd., which is controlled by a member of the Board of
Directors of one of the subsidiaries of the Group and received Directors' fee
of US$50 thousand (30 June 2024: US$50 thousand; 31 December 2024: US$214
thousand).
Purchases of property, plant, equipment and investments
The table below details the transactions of a capital nature, which were
undertaken between Group companies and entities under common control,
associated companies and other related parties during the periods presented.
6 months ended 30.06.25 (unaudited) 6 months ended 30.06.24 (unaudited) Year ended 31.12.24 (audited)
US$000 Entities under common control Asso-ciated compa-nies Other related parties Entities under common control Asso- ciated compa- Other related parties Entities under common control Asso- ciated compa- Other related parties
nies nies
Purchases in the ordinary course of business - - - 58 - - 3,109 - -
Total purchases of property, plant and equipment - - - 58 - - 3,109 - -
During the comparative periods ended 30 June 2024 and 31 December 2024, the
Group purchased major spare parts and equipment from FZ Solutions LLC
totalling US$58 thousand and US$3,109 thousand in respect of the continuation
of the Wave 1 pellet plant expansion and hydrogen projects. No such purchases
were made during the period ended 30 June 2025.
The FPM Charity Fund owns 75% of the Sport & Recreation Centre ("SRC") in
Horishni Plavni and made contributions totalling US$57 thousand during the
period ended 30 June 2025 (30 June 2024: US$49 thousand; 31 December 2024:
US$100 thousand) for the construction and maintenance of the building,
including costs related to electricity, gas and water consumption.
Balances with related parties
The outstanding balances, as a result of transactions with related parties,
for the periods presented are shown in the table below:
As at 30.06.25 (unaudited) As at 31.12.24 (audited) As at 30.06.24 (unaudited)
US$000 Entities Asso-ciated compa-nies Other related parties Entities under common control Asso- ciated compa- Other related parties Entities under common control Asso- ciated compa- Other related parties
under common control nies nies
Other non-current assets (g) 522 - - 517 - - 3,188 - -
Total non-current assets 522 - - 517 - - 3,188 - -
Trade and other receivables (h) 21 2,316 - 155 2,416 - 91 2,928 -
Prepayments and other current assets (i) 80 - - 93 - - 309 390 -
Total current assets 101 2,316 - 248 2,416 - 400 3,318 -
Trade and other payables (j) 1,129 - - 1,085 - - 1,616 21 -
Accrued and contract liabilities - - - - - - 7 - -
Total current liabilities 1,129 - - 1,085 - - 1,623 21 -
A description of the most material balances which are over US$200 thousand in
the current or comparative periods is given below.
Entities under common control
g Other non-current assets include prepayments for property, plant and
equipment totalling US$522 thousand (31 December 2024: US$517 thousand; 30
June 2024: US$3,188 thousand) made to FZ Solutions LLC mainly in relation to
the Wave 1 expansion project of the processing plant.
i Prepayments and other current assets totalling US$27 thousand to FZ
Solutions LLC (31 December 2024: US$22 thousand; 30 June 2024: US$269
thousand) relate to the purchase of spare parts and services.
j Trade and other payables of US$81 thousand (31 December 2024: US$167
thousand; 30 June 2024: US$732 thousand) relate to the purchase of oxygen,
metal scrap and services from Kislorod PCC. See Note 19 Commitments,
contingencies on for further details regarding the application to open
bankruptcy proceedings ("creditor protection proceedings") against Ferrexpo
Poltava Mining ("FPM") filed by the related party;
j Trade and other payables of US$682 thousand (31 December 2024: US$549
thousand; 30 June 2024: US$435 thousand) relate to the purchase of spare parts
and services from FZ Solutions LLC;
j Trade and other payables of US$247 thousand (31 December 2024: US$316
thousand; 30 June 2024: US$102 thousand) relate to the purchase of spare parts
and services from Uzhgorodsky Turbogas, OJSC; and
j At the end of the comparative periods ended 31 December 2024 and 30
June 2024 trade and other payables totalling US$88 thousand and US$203
thousand related to the purchase of replacement spare parts from Valsa GTV
Ltd. There was no such balance as at 30 June 2025.
Associated companies
h Trade and other receivables of US$2,316 thousand (31 December 2024:
US$2,416 thousand; 30 June 2024: US$2,928 thousand) relate to dividend
declared by TIS Ruda LLC prior to the beginning of the war and collection is
expected to commence in the second half of the financial year 2024. The
outstanding balance is net of an allowance of US$280 thousand (31 December
2024: US$278 thousand, 30 June 2024: nil). Dividend payments totalling US$123
thousand were received during the period ended 30 June 2025 (31 December 2024:
US$131 thousand; 30 June 2024: nil) and further payments are expected to be
received during the second half of 2025.
i Prepayments and other current assets in amount of US$390 thousand to
TIS Ruda LLC as at the end of the comparative period ended 30 June 2024
related to purchases of logistics services. No such prepayments were made as
at 30 June 2025 or as at 31 December 2024.
Payments on behalf of a key management member
As disclosed in Note 19 Commitments, contingencies and legal disputes, the
Group is subject to various legal actions and ongoing court proceedings
initiated by certain governmental bodies in Ukraine. It is current practice of
these governmental bodies to issue notices of suspicion to members of the
senior management of the Group's subsidiaries in Ukraine, requesting
significant bail payments.
During the half year ended 30 June 2025, the Group made bail payments
totalling US$120 thousand (31 December 2024: US$1,325 thousand; 30 June 2024:
US$1,259 thousand) on behalf of one member of the senior management of one of
the Group's subsidiaries in Ukraine (31 December 2024: three members; 30 June
2024: one member).
Due to their roles as key management members of the Group, the payments made
are considered to be related party transactions under the Listing Rules as the
payments were made to their benefit. As a result, and as required by the
Listing Rules, the Group consulted its sponsor before making any of these
payments.
Note 22: Events after the reporting period
No material adjusting or non-adjusting items have occurred subsequent to the
period-end.
Alternative Performance Measures ("APM")
When assessing and discussing the Group's reported financial performance,
financial position and cash flows, management may make reference to
Alternative Performance Measures ("APMs") that are not defined or specified
under International Financial Reporting Standards ("IFRS").
APMs are not uniformly defined by all companies, including those in the
Group's industry. Accordingly, the APMs used by the Group may not be
comparable with similarly titled measures and disclosures made by other
companies. APMs should be considered in addition to, and not as a substitute
for or as superior to, measures of financial performance, financial position
or cash flows reported in accordance with IFRS.
Ferrexpo makes reference to the following APMs in the 2025 Half Year Results.
C1 cash cost of production
Definition: Non-financial measure, which represents the cash costs of
production of iron pellets from own ore divided by pellet production volume of
own production ore. Non-C1 cost components include non-cash costs such as
depreciation, inventory movements and costs of purchased ore and concentrate.
The Group presents the C1 cash cost of production because it believes it is a
useful operational measure of its cost competitiveness compared to its peer
group.
US$000 6 months ended 30.06.25 6 months ended 30.06.24 Year ended 31.12.24
(unaudited) (unaudited) (audited)
C1 cash costs 167,307 259,975 509,146
Non-C1 cost components 130,046 44,960 57,380
Inventories recognised as an expense upon sale of goods 297,353 304,935 566,526
Own ore produced (kt) 2,170 3,297 6,071
C1 cash cost per tonne (US$) 77.1 78.8 83.9
The non-C1 cost components include costs related to the production of
concentrate. During the six-month period ended 30 June 2025, the proportion of
the concentrate production increased by 184% from 446 thousand tonnes during
the six-month period ended 30 June 2024 to 1,224 thousand tonnes.
Underlying EBITDA
Definition: The Group calculates the Underlying EBITDA as profit before tax
and finance plus depreciation and amortisation, net gains and losses from
disposal of investments and property, plant and equipment, effects from
share-based payments, write-offs and impairment losses, operating foreign
exchange gains/losses and exceptional items. The Underlying EBITDA is
presented because it is a useful measure for evaluating the Group's ability to
generate cash and its operating performance.
Historically and in agreement with the Group's definition of the Underlying
EBITDA at that time, the Group's Underlying EBITDA included operating foreign
exchange gains and losses, which could be material depending on the
devaluation of the Ukrainian hryvnia compared to the US dollar. During the
comparative period ended 30 June 2024, the Group amended its definition of the
Underlying EBITDA by excluding the operating foreign exchange gains and
losses. The vast majority of the Group's operating foreign exchange gains or
losses is expected to incur on intercompany trade receivable balance of the
Ukrainian subsidiaries, which are denominated in US dollar. For practicability
reason, the entire balance of the operating foreign exchange gains and losses
are excluded from the Group's Underlying EBITDA. It is management's view that
the amended definition better reflects the Group's ability to generate cash
and to evaluate its operating performance.
See Note 3 Segment information for further details on the composition of the
Group's Underlying EBITDA.
Closest equivalent IFRS measure: Profit before tax and finance.
Rationale for adjustment: The Group presents the underlying EBITDA as it is a
useful measure for evaluating its ability to generate cash and its operating
performance. Also it aids comparability across peer groups as it is a
measurement that is often used.
Reconciliation to closest IFRS equivalent:
US$000 Notes 6 months ended 30.06.25 6 months ended 30.06.24 Year ended 31.12.24
(unaudited) (unaudited) (audited)
Underlying EBITDA 3,890 79,043 69,310
Gains/(losses) on disposal and liquidation of property, plant and equipment 5 74 (45) (231)
Share-based payments (274) (113) (320)
Write-(offs)/backs and impairments 5 (154,309) 118 (71,871)
Depreciation and amortisation 5 (35,586) (33,606) (60,281)
Operating foreign exchange (losses)/gains 6 (7,292) 55,258 83,321
(Loss)/profit before tax and finance (193,497) 100,655 19,928
Net cash/(debt)
Definition: Cash and cash equivalents net of interest-bearing loans and
borrowings.
Closest equivalent IFRS measure: Cash and cash equivalents.
Rationale for adjustment: Net cash/(debt) is a measurement of the strength of
the Group's balance sheet. It is presented as it is a useful measure to
evaluate the Group's financial liquidity.
Reconciliation to closest IFRS equivalent:
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Cash and cash equivalents 16 52,262 105,919 115,131
Lease liabilities - current 17 (2,476) (4,665) (3,092)
Lease liabilities - non-current 17 (241) (419) (528)
Net cash 49,545 100,835 111,511
Capital investment
Definition: Capital expenditure for the purchase of property, plant and
equipment and intangible assets.
Closest equivalent IFRS measure: Purchase of property, plant and equipment and
intangible assets (net cash flows used in investing activities).
Rationale for adjustment: The Group presents the capital investment as it is a
useful measure for evaluating the degree of capital invested in its business
operations.
Reconciliation to closest IFRS equivalent:
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Purchase of property, plant and equipment and intangible assets 10 28,451 101,688 55,371
(net cash flows used in investing activities)
Total liquidity
Definition: Sum of cash and cash equivalents and available committed
facilities and uncommitted facilities. No committed facilities are outstanding
as at 30 June 2025, or at the end of the comparative periods ended 31 December
2024 and 30 June 2024. No uncommitted facilities, which would include trade
finance facilities secured against receivable balances related to these
specific trades, our outstanding or available as at 30 June 2025, or at the
end of the comparative periods ended 31 December 2024 and 30 June 2024. See
Note 17 Lease liabilities for further information.
Closest equivalent IFRS measure: Cash and cash equivalents.
Rationale for adjustment: The Group presents total liquidity as it is a useful
measure for evaluating its ability to meet short-term business requirements.
Reconciliation to closest IFRS equivalent:
US$000 Notes As at 30.06.25 As at 31.12.24 As at 30.06.24
(unaudited) (audited) (unaudited)
Cash and cash equivalents 16 52,262 105,919 115,131
Total liquidity 52,262 105,919 115,131
Glossary
Act The Companies Act 2006
AGM The Annual General Meeting of the Company
Articles The Articles of Association of the Company
Audit Committee The Audit Committee of the Company's Board
Bank F&C Bank Finance & Credit
Belanovo or Bilanivske An iron ore deposit located immediately to the north of Yeristovo
Benchmark Price International seaborne traded iron ore pricing mechanism used by market
participants, including Ferrexpo
Beneficiation Process A number of processes whereby intermediate iron ore products are upgraded to
higher value iron ore products, such as iron ore pellets
BIP Business Improvement Programme, a programme of projects to increase production
output and efficiency at FPM
Blast furnace pellets Used in Basic Oxygen Furnace "BOF" steelmaking and constitute about 70% of the
traded pellet market
Board The Board of Directors of the Company
Bt Billion tonnes
C1 costs Represents the cash costs of production of iron ore pellets from own ore,
divided by production volume from 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 capesize vessels are able to
transit through the Suez Canal
Capex Capital expenditure for the purchase of property, plant and equipment and
intangible assets
Capital Employed The aggregate of equity attributable to shareholders, non-controlling
interests and borrowings
CFR Delivery including cost and freight
CHF Swiss Franc, the currency of Switzerland
China & South East Asia This segmentation for the Group's sales includes China and Vietnam
CID Committee of Independent Directors
CIF Delivery including cost, insurance and freight
CIS The Commonwealth of Independent States
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
Controlling Shareholder Fevamotinico S.a.r.l. holds 49.3% of the voting rights in Ferrexpo plc as at
the date of this report. The Minco Trust is a discretionary trust that has
three beneficiaries, consisting of Mr Zhevago and two other members of his
family. For the purposes of the UK Listing Rules, each of the beneficiaries of
The Minco Trust is considered a controlling shareholder of Ferrexpo plc
Corporate Governance Code 2018 UK Corporate Governance Code
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
DAP Delivery at place
DFS Detailed feasibility study
Directors The Directors of the Company
Direct reduction Used in Direct Reduction Iron ("DRI") production
Direct reduction A feedstock, in addition to scrap steel for the production of steel in
Electric Arc Furnace ("EAF") steelmaking. DR pellets are a niche, higher
"DR" pellets quality product with Fe content of 67% or above, and a combined level of
silica and alumina of <2%
EBT Employee benefit trust
EPS Earnings per share
ERPMC Executive Related Party Matters Committee
Europe This segmentation for the Group's sales includes countries across Europe and
includes Turkey
Executive Committee The Executive Committee of management appointed by the Board
Executive Directors The Executive Directors of the Company
FBM LLC Ferrexpo Belanovo Mining, a company incorporated under the laws of Ukraine
Fe Iron
Ferrexpo The Company and its subsidiaries
Ferrexpo AG Group Ferrexpo AG and its subsidiaries, including FPM, FYM and FBM
Fevamotinico 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, an inland waterway transport group operating primarily on the
Danube River 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 PJSC Ferrexpo Poltava Mining, a company
incorporated under the laws of Ukraine
FRMCC Finance, Risk Management and Compliance Committee, a sub-committee of the
Executive Committee
FTSE All-Share A capitalisation-weighted index of approximately 600 companies that represent
over 95 of the total LSE market capitalisation.
FYM LLC Ferrexpo Yeristovo Mining, a company incorporated under the laws of
Ukraine
GPL Gorishne-Plavninske-Lavrykivske, the iron ore deposit being mined by FPM
Group The Company and its subsidiaries
HSE Health, safety and environment
HSEC Committee The Health, Safety, Environment and Community Committee
IAS International Accounting Standards
IASB International Accounting Standards Board
IFRIC interpretations IFRS interpretations as issued by the IFRS Interpretations Committee
IFRS International Financial Reporting Standards
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
IRR Internal Rate of Return
JORC Australasian Joint Ore Reserves Committee - the internationally accepted code
for ore classification
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
LLC Limited Liability Company (in Ukraine)
LSE London Stock Exchange
LTI Lost time injury
LTIFR Lost time injury frequency rate, the number of lost time injuries that
occurred divided by the number of hours worked for a reporting period
LTIP Long-term Incentive Plan
m(3) Cubic metre
MENA This segmentation for the Group's sales includes customers in the Middle East
and North Africa region
Mm Millimetre
Mt Million tonnes
Mtpa Million tonnes per annum
NBU National Bank of Ukraine
Nominations Committee The Nominations Committee of the Board
Non-executive Directors Non-executive Directors of the Company
NOPAT Net operating profit after tax
North America This segmentation for the Group's sales includes the United States
North East Asia This segmentation for the Group's sales includes Japan and Korea
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
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
PPE Personal protective equipment
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
PXF Pre-export finance
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 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
Resources Concentration or occurrence of material of intrinsic economic interest in or
on the earth's crust in such form,
quality and quantity that there are reasonable prospects for eventual economic
extraction
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
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 US short ton, equal to 0.9072 metric tonnes
Tonne or t Metric tonne
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
UAH Ukrainian hryvnia, the currency of Ukraine
UK adopted IFRS International Financial Reporting Standards adopted for use in the United
Kingdom
Ukr SEPRO The quality certification system in Ukraine, regulated by law to ensure
conformity with safety and environmental standards
Underlying EBITDA The Group calculates the Underlying EBITDA as profit before tax and finance
plus depreciation and amortisation, adjusted for net gains and losses from
disposal of investments property, plant and equipment, effects from
share-based payments, write-offs and impairment losses, operating foreign
exchange gains/losses and exceptional items
Underlying EBITDA margin Underlying EBITDA (see definition above) as a percentage of revenue
US$/t US dollars per tonne
Value-in-use The implied value of a material to an end user relative to other options, e.g.
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
WAFV Weighted average fair value
WMS Wet magnetic separation
Yeristovo or Yerystivske The deposit being developed by FYM
Mr Zhevago/Kostyantin Zhevago Kostyantin Zhevago, one of three beneficiaries of The Minco Trust. The Minco
Trust is the indirect parent undertaking of Fevamotinico S.a.r.l. which in
turn holds 49.3% of the voting rights in Ferrexpo plc as at the date of this
report.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UVURRVOUWRURRecent news on Ferrexpo
See all newsREG - Ferrexpo plc - Interim Results for six months ended 30 June 2025
AnnouncementREG - Ferrexpo plc - Production Report for 2Q 2025
AnnouncementREG - Ferrexpo plc - Director/PDMR Shareholding
AnnouncementREG - Ferrexpo plc - Director/PDMR Shareholding
AnnouncementREG - Ferrexpo plc - Result of AGM
Announcement