22nd May 2014 08:22
LONDON (Alliance News) - Ferrexpo PLC Thursday said its operations in Ukraine remain unaffected by the political instability in the country, and it expects to shortly receive bonds with a value of USD117 million in local currency from the Ukrainian government for an outstanding value-added tax refund.
The iron ore producer, which operates solely in Ukraine, will say at its annual general meeting on Thursday that both production and shipment of its iron ore pellets have been in line with expectations and costs have continued to fall due to improved efficiency and a decline in the local currency exchange rates.
The company will say that its second flotation plant was successfully commissioned in the first quarter, and its capital investment programme remains on track to increase output to a run rate of 12 million tonnes of pellets per year.
Ferrexpo is expected to also say that Ukrainian VAT was refunded normally in April, and the Ukrainian government has expressed its intention to issue bonds for outstanding VAT refunds.
As a result, Ferrexpo is expected to qualify to receive bonds with a value of USD117 million in the coming months, amounting to 53% of the total balance it was owed in Ukraine at April 30, with the remainder currently in the court process.
The miner, which operates mainly in the Poltava region on the Dnieper river in Ukraine, has been providing updates since March on how its operations have been affected following the change of leadership in the country and standoff with Russia.
Ferrexpo shares were up 1.6% to 139.05 pence, putting it in the top ten FTSE 250 risers during early trading on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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