7th Apr 2025 09:14
(Alliance News) - Ferrexpo PLC on Monday reported higher production in the first quarter of 2025, mainly due a jump in iron concentrate output, but said this would not be reflected in higher earnings due to higher costs.
Shares in Ferrexpo were down 4.7% to 45.60 pence each in London on Monday morning. Shares partially rebounded after hitting an intraday low of 43.00p.
The Baar, Switzerland-based miner in Ukraine said total commercial production was 2.13 million tonnes in the quarter to March, up 20% from 1.77 million in the fourth quarter of 2024, and up 3.9% from 2.05 million tonnes a year before.
This comprised 1.3 million tonnes of pellets and 777,718 tonnes of commercial concentrate, compared with 1.8 million tonnes and 240,516 tonnes respectively a year ago.
Interim Executive Chair Lucio Genovese said "total commercial production was the highest quarterly rate since the full-scale invasion [of Ukraine by Russia] 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," he added.
But Genovese cautioned that the increase in production did not translate into improved earnings in the quarter 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," he added.
Genovese pointed to a decision in March by Ukrainian tax authorities to suspend the refund of VAT, worth around USD12.5 million, for the month of January at its two main operating subsidiaries, Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining.
"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," Genovese added.
The chair said Ferrexpo would continue to press for the restoration of the VAT refund "so that we can sustain our business at higher operating levels, maintain our workforce, and the integrity of our operations."
By Jeremy Cutler, Alliance News reporter
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