REG - Ferrexpo plc - Production Report for 2Q 2025

FerrexpoAnnouncement

07/07/2025 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:20250707:nRSG9592Pa&default-theme=true

RNS Number : 9592P  Ferrexpo PLC  07 July 2025

7 July 2025

 

Ferrexpo plc

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

 

Production Report for 2Q 2025

 

Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore
products, reports production results for the first quarter to the end of March
2025 ("the quarter" or "2Q" or "2Q 2025").

Updates

·   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 May 2025, the Group reported a rolling 12-month LTIFR of
0.70, which was above the historic five-year trailing average of 0.52. Zero
workplace fatalities have been reported for more than four years.

·   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 million.

·   Due to the ongoing suspension of VAT refunds and the resulting
reduction in financial liquidity, the Group has been forced to downscale
operations from two to one pelletising line and also to reduce the production
of high-grade concentrate.

·   As a result, total commercial production for the quarter was 1.3
million tonnes, 40% lower than the 2.1 million tonnes achieved in the first
quarter (the highest production achieved in any quarter since the full-scale
invasion in February 2022).

·   The Group demonstrated agility and flexibility however, as it continued
to benefit from strong demand for its high-grade low-alumina concentrate from
customers in China, representing over a third-of its product mix for the first
two quarters of 2025.

·   The Group has worked extensively to lower its costs to remain
financially viable. This includes reducing working time for employees, cuts in
procurement of goods services and a suspension of all non-essential CapEx,
overheads and CSR spending.

Summary production statistics

 (tonnes, unless otherwise stated)  Fe Grade  2Q 2025    1Q 2025    Change  6M 2025    6M 2024    Change
 Total commercial production                  1,267,668  2,125,467  -40.4%  3,393,135  3,727,336  -9.0%
 Total pellet production                      821,882    1,347,749  -39.0%  2,169,631  3,297,441  -34.2%
 DR pellets (FDP)                   67%       0          81,787     -       81,787     162,645    -49.7%
 Ferrexpo premium pellets           65%       821,882    1,265,962  -35.1%  2,087,844  3,134,796  -33.4%
 Commercial concentrate             67%       445,786    777,718    -42.7%  1,223,504  429,865    184.6%

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

"The strong momentum at the start of the year, including our best quarterly
production since the full-scale invasion in February 2022, was significantly
curtailed in the second quarter as we started to experience the full impact of
the Ukrainian tax authorities' decisions to suspend the refund of VAT to our
Ukrainian subsidiaries. During the second quarter, due to the financial impact
of the continued non-receipt of VAT refunds, we were only able to achieve

1.3 million tonnes of commercial production, forty percent lower compared to
the previous quarter. Despite a weaker iron ore pellet market, we were able to
significantly pivot our production mix and benefit from strong demand in China
for our high-grade low-alumina iron ore concentrates. During the first six
months of 2025 concentrate sales represented 36% of our production mix, three
times more than in the same period a year ago. In the challenging operating
environment and iron ore market, it is pleasing that we were able to be so
agile, and benefit from the demand for high-grade concentrate products.

Lower iron ore prices and lower production, have, however, weighed on margins.
This has been exacerbated by higher prices for raw materials such as gas and
electricity. Throughout the second quarter the Group worked extensively to
lower its cost base to remain financially viable. This includes placing
approximately 37% of employees on reduced working time or on furlough, cuts in
procurement of goods and services and a suspension of all non-essential CapEx,
CSR and humanitarian spending. In tandem, all efforts and representations are
underway with the respective authorities and government bodies in Ukraine and
internationally to try to resolve the VAT refund suspension. I am grateful to
all our colleagues for their efforts and contributions during this challenging
time.

At the end of June, 738 colleagues are serving in the Armed Forces of Ukraine,
more than at any time since the full-scale invasion in February 2022. During
the period we also welcomed more colleagues back to our communities as
veterans, a total 186 so far, of whom 98 have returned to the workplace."

 

 

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 All Share and
FTSE4Good indices. The Group produces high grade iron ore products, which are
a 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 iron ore 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  UPDUNURRVWUBRUR