REG - Ferrexpo plc - Production Report for 1Q 2024

FerrexpoAnnouncement

23/04/2024 07:00

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RNS Number : 6539L  Ferrexpo PLC  23 April 2024

 

 

23 April 2024

 

 

 

Ferrexpo plc

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

 

Production Report for 1Q 2024

 

 

Ferrexpo plc (LSE: FXPO), a producer of premium iron ore pellets, is pleased
to report production results for the first quarter to the end of March 2024
("the quarter" or "1Q" or "1Q 2024").

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

"Our operations have delivered an exceptional first quarter performance, with
a 203% increase in total production compared to the previous quarter, to over
two million tonnes of iron ore pellets and concentrate.This is our best
quarterly performance since the full-scale invasion of Ukraine and is a
tribute to the significant contribution of our workforce that has worked
tirelessly since February 2022 to maintain operations in exceptionally
challenging conditions.

During the quarter, we were once again able to export from Ukrainian ports,
allowing us to export larger volumes to Europe and resume sales to MENA and
Asian customers.  It has taken considerable effort to restart these exports,
so we are grateful to our teams on site, at port and to the many logistics
providers and authorities that have helped achieve this.

At present, we are experiencing more conscriptions from our workforce, with
669 Ferrexpo employees serving in the army, the highest number since the start
of the full-scale invasion. To date, 67 serving members have returned. The
reintegration of veterans is a complex issue and we are responding with a
comprehensive programme of support that includes physical and psychological
rehabilitation as well as retraining for employees who cannot return to their
previous roles due to health issues.

The challenges of the war are constantly changing our work environment and we
must continuously adapt to shorter and tighter time scales, which requires a
flexible workforce. To ensure our continued resilience we have placed a very
strong focus on training where we have multiple initiatives in place at the
Ferrexpo Technical Expertise Centre to upskill, cross-skill and re-skill
employees, including fast tracking vocational qualifications.

It is pleasing that despite facing so many challenges, we are able to report
solid production and sales numbers for the quarter. As long as we believe the
level of risk is acceptable, taking into account the ongoing war in Ukraine,
we will continue to use all the export capacity available to ensure that we
are supporting the interests of all stakeholders."

 

Highlights

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

·    Ferrexpo continues to produce, transport and sell its products
despite a challenging environment in Ukraine.

·    At the end of March 2024, the Group reported a rolling 12-month LTIFR
of 0.36, below the historic five-year trailing average of 0.52.  Zero
fatalities have been reported for over three years.

·    The Group has successfully operated two, sometimes three pelletising
lines (out of four) during the quarter, alternating product quality depending
on demand from customers and expanded logistics capacity.

·    With more stable production from each of the pelletiser lines, total
iron ore pellet production for the quarter was 1,813,973 tonnes, a 189%
increase compared to the previous quarter. In addition 240,516 tonnes of 67%
Fe concentrate were also produced.

·    Total sales volumes for the quarter totalled 1,991,936 tonnes. All
sales were for products grading 65% Fe or above.

 

 

 

 

Commenting on the Group's technical performance, Nikolay Kladiev, Group Chief
Financial Officer said:

"The ability to export through the Ukrainian Black Sea ports has been positive
not just for our production and sales, but also for the morale of our workers.
They can sense that the company is working hard to protect their jobs and
livelihoods.

Although it is positive that we have been able to export through the Black Sea
ports, it has not been without its challenges. Logistics have been complex and
shipping and insurance costs have increased. As the ports provide access to
larger vessels, we have, however, benefited from economies of scale.

The year started with strong iron ore prices, and it was pleasing that we
could ramp-up production and exports to take advantage of these prices.
Although our unit costs have benefited from higher production rates, as we
brought back capacity, total costs increased and as the quarter closed, we
have increased inventory."

 

Summary production statistics

                              Fe Grade  1Q 2024    4Q 2023  Change  3M 2024    3M 2023  Change
 Total commercial production            2,054,489  677,168  +203%   2,054,489  953,794  115%
 Total pellet production                1,813,973  627,052  +189%   1,813,973  900,757  101%
 Direct reduction pellets     67%       -          -        -       -          -        -
 Ferrexpo premium pellets     65%       1,731,427  577,141  +200%   1,731,427  900,757  92%
 Other pellets                65%       82,546     49,911   +65%    82,546     -        -
 Concentrate production       67%       240,516    50,116   +380%   240,516    53,037   353%

 

 

 

 

 

Contact:

For further information, please contact:

 Ferrexpo:
 Nick Bias        n.bias@ferrexpo.ch (mailto:r.simmons@ferrexpo.ch)           +44 (0)7733 177 831
 Tavistock:
 Jos Simson       ferrexpo@tavistock.co.uk (mailto:ferrexpo@tavistock.co.uk)  +44 (0)207 920 3150 / +44 (0)7899 870 450

 Gareth Tredway

 

About Ferrexpo:
Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and a premium listing on the London Stock Exchange in the FTSE 250 index (ticker FXPO). 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 invasion of Ukraine in February 2022, the Group was the world's third largest exporter of pellets to the global steel industry. The Group has a global customer base comprising of premium steel mills around the world, which includes steel mills in Austria, Germany, Japan, South Korea, Taiwan, China, Slovakia, the Czech Republic, Turkey, Vietnam and America. For further information, please visit
www.ferrexpo.com (http://www.ferrexpo.com)
.

 

Please note that numbers may not add up due to rounding and all numbers
contained herein may be subject to change.

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