REG - Ferrexpo plc - Production Report for 1Q 2025

FerrexpoAnnouncement

07/04/2025 07:00

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RNS Number : 8893D  Ferrexpo PLC  07 April 2025

7 April 2025

 

Ferrexpo plc

("Ferrexpo" or the "Company" or the "Group")

 

Production Report for 1Q 2025

 

Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore pellets,
is pleased to report production results for the first quarter to the end of
March 2025 ("the quarter" or "1Q" or "1Q 2025").

Highlights

·  Ferrexpo remains committed to the safety and wellbeing of its workforce
and the Group continues to take extensive measures to protect employees, their
families, and local communities.

·   At the end of February 2025, the Group reported a rolling 12-month
LTIFR of 0.66, which was above the historic five-year trailing average of
0.52. Zero workplace fatalities reported for over four years.

·   During the quarter the Group operated two pelletising lines (out of
four) in addition to commercial concentrate production, however, due to the
recently announced suspension of VAT refunds, operations have reduced to one
pellet line.

·   Record quarterly production since the start of the full-scale invasion
in February 2022, totalling 2.1 million tonnes, comprising 1.3 million tonnes
of pellets and 0.8 million tonnes of 67% Fe concentrate due to a strong
increase in high grade concentrates sold to customers in Asia.

·   Production of higher margin Ferrexpo DR pellets (FDP) continued during
the quarter, albeit at a lower rate of 81k tonnes.

Summary production statistics

 (tonnes, unless otherwise stated)  Fe Grade  1Q 2025    4Q 2024    Change  1Q 2025    1Q 2024    Change
 Total commercial production                  2,125,467  1,769,073  +20%    2,125,467  2,054,489  +3%
 Total pellet production                      1,347,749  1,503,373  -10%    1,347,749  1,813,973  -26%
 DR pellets (FDP)                   67%       81,787     163,552    -50%    81,879     0          -
 Ferrexpo premium pellets           65%       1,105,049  1,204,380  -8%     1,105,049  1,731,427  -36%
 Other pellets                      65%       160,913    135,441    +19%    160,913    82,546     +95%
 Commercial concentrate             67%       777,718    265,700    +193%   777,718    240,516    +223%

Commenting on the Group's performance, Lucio Genovese, Interim Executive
Chair, said:

"For the first quarter of 2025, total commercial production was the highest
quarterly rate since the full-scale invasion started in February 2022. This is
due to an increase in production of high-grade concentrates, sold to customers
in Asia, combined with a stable production of Ferrexpo premium pellets. We are
pleased that once again we have demonstrated our ability to adapt to changing
market conditions , taking advantage of the demand for our

concentrates in Asia.

The increase in production however did not translate into improved earnings
because of sustained high input costs, in particular imported electricity and
deteriorating iron ore pellet premiums and prices. The environment in which we
are operating has become increasingly challenging. In March, the Ukrainian tax
authorities notified our two main operating subsidiaries, Ferrexpo Poltava
Mining and Ferrexpo Yeristovo Mining of their decision to suspend the refund
of VAT for the month of January 2025, for the total amount of UAH 512.9
million (approximately US$ 12.5 million). This suspension of the VAT refund,
which is considerable, has resulted in lowering the available liquidity to
fund the operations. This has forced us to immediately downscale our
operations to one pellet line and to implement significant cost cutting
measures across the business, affecting the workforce, mining and processing
operations, repairs and maintenance, capital expenditure and humanitarian and
social funding.

This will have a broader impact on the economic and social fabric of Horishni
Plavni, a city of 50,000 people where we are the main employer, the Poltava
Region and the 3,000 small and local businesses that depend on us. There will
also be an impact on the national economy due to lower tax and royalty
contributions, and payments to suppliers, including energy providers,
Ukrainian railways, and ports.

We continue to make representations to the Ukrainian government and other
stakeholders to restore the refund

of VAT so that we can sustain our business at higher operating levels,
maintain our workforce, and the integrity

of our operations.

At the end of March, 708 of our colleagues were serving in the Armed Forces of
Ukraine and 103 of the 176 veterans that have been demobilised have returned
to work. Tragically, we received confirmation in February of one more
colleague killed while serving in the Armed Forces of Ukraine bringing the
total to 46 since the full-scale invasion in February 2022."

 

For further information, please contact:

 Ferrexpo:
 Nick Bias        n.bias@ferrexpo.ch (mailto:n.bias@ferrexpo.com)             +44 (0)7733 177 831
 Tavistock:
 Jos Simson       ferrexpo@tavistock.co.uk (mailto:ferrexpo@tavistock.co.uk)  +44 (0)7899 870 450

 Gareth Tredway                                                               +44 (0)7785 974 264

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 250 and FTSE4Good
indices. The Group produces high grade iron ore pellets, which are a premium
product 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) .

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