REG - Ferrexpo plc - Production Report for 3Q 2024

FerrexpoAnnouncement

07/10/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241007:nRSG0867Ha&default-theme=true

RNS Number : 0867H  Ferrexpo PLC  07 October 2024

7 October 2024

 

Ferrexpo plc

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

 

Production Report for 3Q 2024

 

Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore pellets,
announces production results for the third quarter to the end of September
2024 ("the quarter" or "3Q" or "3Q 2024").

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 August 2024, the Group reported a rolling 12-month LTIFR
of 0.37, below the historic five-year trailing average of 0.52. Zero
fatalities have been reported for over three years.

·   The Group has successfully operated one to two pelletising lines (out
of four) during the quarter, with a focus on higher quality products.

·   With variable production from each of the pelletiser lines, total
production for the quarter was 1,397,698 tonnes, comprising 1,269,727 tonnes
of pellets and 127,971 tonnes of 67% Fe concentrate. Total production for the
nine months to the end of September 2024 was 5,125,034 tonnes, a 47% increase
compared to the comparable period last year.

·   During the quarter production of Ferrexpo DR pellets (FDP) continued,
with a total of three shipments to two customers.

Summary production statistics

 (tonnes, unless otherwise stated)  Fe Grade  3Q 2024    2Q 2024    Change  1Q 2024    9M 2024    9M 2023    Change
 Total commercial production                  1,397,698  1,672,506  -16.4%  2,054,830  5,125,034  3,474,860  47.5%
 Total pellet production                      1,269,727  1,483,468  -14.4%  1,813,973  4,567,168  3,218,273  41.9%
 DR pellets (FDP)                   67%       163,523    162,645    0.5%    0          326,168    0          -
 Ferrexpo premium pellets           65%       944,279    1,104,904  -14.5%  1,731,427  3,780,610  3,218,273  17.5%
 Other pellets                      65%       161,925    215,919    -25.0%  82,546     460,390    0          -
 Concentrate production             67%       127,971    189,038    -32.3%  240,857    557,866    256,587    117.4%

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

"It is with sadness that during the quarter we were informed that five more of
our brave colleagues were killed while serving in the Armed Forces of Ukraine.
These men worked as electricians, welders, locomotive drivers and repairmen.
We mourn their loss, offer our sincere condolences, and have provided support
to their families.

For Ferrexpo's operations, the third quarter presented a very challenging
operating and macroeconomic environment. As we highlighted in the interim
results, the requirement to import 80% of our electricity from our western
neighbours remains in place, and the resulting high tariffs continue to have a
negative impact on our costs. This has been exacerbated by elevated shipping
freight rates and additional war risk insurance premiums.

To mitigate the pressure on margins, our strategy has been to focus on sales
of higher quality iron ore products to customers in close geographical
proximity. This included expanding our customer base and sales of premium
priced DR pellets in the MENA region.

Our ability to quickly adapt to the challenges that face us is testament to
the flexibility that we built in our operating model. This has enabled us to
marginally reduce the impact from both the aforementioned factors, and from
lower iron ore prices, where the fall in benchmark 65% Fe price briefly tested
price support levels of US$100 per tonne during the quarter, bottoming at
levels last seen in 2022. Encouragingly, late in the period, prices began to
recover on the back of an improvement in sentiment, spurred on by
announcements of economic stimulus measures in China.

At the present time, 669 of our colleagues are serving in the Armed Forces,
and 149 have returned as veterans, of whom 93 have already returned to work.
We continue to support our employees and local communities through our
humanitarian and CSR programmes and initiatives."

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

"The combined effects of much lower iron ore prices and higher input costs,
put significant pressure on our margins during the third quarter. High
electricity tariffs, which I highlighted at our interims, continue to increase
and add to our C1 costs compared to the start of the year. We also continued
to see elevated freight rates and additional war risk insurance premiums. In
response, we have sought to contain costs where possible and to manage our
cash position, which at the end of the third quarter remained around US$100
million.

It is encouraging to note that in the final days of September, the Chinese
stimulus measures, notably the removal of home purchase restrictions provided
welcome support for iron ore prices. The pessimism surrounding iron ore prices
appears to have lifted for now, however, the recent volatility of the third
quarter does not provide any certainty that prices will remain at these levels
or improve further. We will continue to keep a vigilant approach to our
financial and operating performance for the remainder of the year."

 

 

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

 
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 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) .

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  DRLUNAKRSAURRAA