Interim Results for six months ended 30 June 2025

6 August 2025

Ferrexpo plc

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

Interim Results for the six months ended 30 June 2025

Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore products to the global steel industry, is pleased to report interim results for the six months ended 30 June 2025 ("the period" or "first half" or "first six months" or "1H 2025").

Commenting on the results, Lucio Genovese, Interim Executive Chair, said:

"The first six months of 2025 have been a tale of two halves. We started the year on a strong footing, with the best quarterly production since the full-scale invasion of Ukraine in February 2022. This momentum, was, however, significantly curtailed in the second quarter as we were forced to downscale our activities due to the decision by the Ukrainian tax authorities' to suspend the refund of VAT to our Ukrainian subsidiaries. This is reflected in a 40% drop in production in the second quarter compared to the first quarter.

We moved quickly to lower our costs. It is regrettable that at present we have had to place approximately 40% of our workforce on reduced working hours or furlough. We have also implemented programmes to optimise stripping rates, repairs and maintenance, and cut non-essential spending across the business. The effects of these measures are difficult to absorb, yet they have been necessary and lessened the severe and negative impact of the suspension of VAT refunds. We have been able to lower our costs as much as possible in order to be competitive in a weak iron ore price environment.

During the first half, we were able to respond to strong demand from Chinese customers for our high-grade low-alumina iron ore concentrate. As a result, during the first six months of 2025, concentrate represented 36% of our production mix, three times more than in the same period a year ago. Once again, we have shown that the flexibility we have built into our business has enabled us to be more responsive to short-term changes in iron ore markets and take advantage of opportunities that present themselves. I anticipate that we will be able to continue benefiting, as we shift away from being a pellet only producer to a producer of different high-grade iron ore products, including a variety of concentrate and pellet feed as well as pellets.

Since the full-scale invasion of Ukraine in February 2022, Ferrexpo has continued to operate and export its products despite the immense challenges posed by the war. By remaining operational we have been able to remain relevant - maintaining a workforce, continuing to supply our customers, and supporting our local communities and Ukraine as a whole. Our calculations indicate that since February 2022 to the end of the reporting period, we have paid more than US$180 million in salaries and US$340 million in taxes, while investing more than US$400 million in capital expenditure, and procuring more than US$1.9 billion in goods and services from within Ukraine.

However, these contributions are at risk. Since the start of 2025, the Ukrainian tax authorities have suspended VAT refunds to our Ukrainian subsidiaries, resulting in lower liquidity and forcing us to downscale production to one pellet line. The tax authority's decision has also forced us to make deep cost cuts, including placing more than a third of our workforce on furlough or reduced working hours, resulting in knock on effects for families and the local community.

If we had been able to continue producing at the same levels as in the first quarter throughout the remainder of 2025, we calculate that we would have paid US$8 million more to our employees, US$23 million more in taxes, and US$150 million more for goods and services to our Ukrainian suppliers. This means that a broader US$180 million will instead be lost in economic contributions to Ukraine.

It is with great sadness that during the first six months of 2025 one more colleague was killed in action, whilst in early July we received notice that a further colleague was killed, bringing the total to 48.Our thoughts are with them and their families during this extremely difficult period. During the first half of this year, 58 more colleagues were mobilised to serve in the Armed Forces of Ukraine, whereas 26 colleagues were demobilised. This means that at the end of June a total of 738 colleagues were serving, more than at any time since the start of the full-scale invasion."

Production and financial summary

· Total commercial production for the first six months of 3.4 million tonnes, a 7% increase compared to the previous six months to 31 December 2024, and a 9% decrease compared to the first six months of 2024.

· Production mix comprised 64% pellets and 36% concentrates for the first six months, compared to 88% pellets and 12% concentrates in the same period last year, demonstrating an ability to be flexible depending on market demand for different high grade iron ore products.

· Total sales for the first six months of 2025 of 3.8 million tonnes (marginally lower compared to the same period last year) of which 60% was exported through Ukrainian Black Sea ports, 35% by rail and 5% by river barge.

· Revenues decreased by 17% to US$453 million (1H 2024: US$549 million) due to lower realised prices and marginally lower sales volumes.

· C1 Cash Cost of Production ("C1 costs") decreased to US$77.1 per tonne in the half year (1H 2024: US$78.8 per tonne), due to reduced mining activities, the effects from lower fuel prices, lower maintenance and a reduction in personnel costs.

· Underlying EBITDA decreased by 95% to US$4 million (1H 2024: US$79 million), reflecting the net effects of lower sales volumes and realised prices and higher production costs.

· Impairment loss of US$154 million.

· Loss after tax of US$196 million (1H 2024: profit US$55 million).

· The Group ended the period with a Net Cash position of US$50 million (31 December 2024: US$101 million), comprising US$52 million of cash and cash equivalents, and minimal financial debt of US$2 million.

· US$28 million capital investment for the period (1H 2024: US$55 million), comprising 55% in sustaining and 45% development capital.

· 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$31.1 million and for the period until the end of June, the cumulative amount is $38.3 million.

· Due to the ongoing suspension of VAT refunds and the resulting reduction in financial liquidity, the Group has been forced to downscale operations to one pelletising line.

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

Commenting on the financial results, Nikolay Kladiev, CFO, said:

"The refusal of the Ukrainian tax authorities to refund the VAT owed to us since the start of 2025 has had a major impact on the operational and financial performance of the Group. At the end of March, we received the first notification that the VAT for the month of January would not be refunded, and as of the date of these interim results we have subsequently received similar notifications for the months up to April. Although we have made representations to the relevant authorities in Ukraine to resume refunds, the severe future effects are already clear. If one assumes that the refunds for June are also denied, the total unpaid refunds for the first six months of 2025 will be US$38.3 million.

In our results, we book the VAT as a receivable because it is money owed to us. Consequently, adding this to the net cash position of US$50 million as at 30 June, it is clear to see that the Group performed with resilience during the first half of the year, given factors outside of our control such as weaker iron ore prices and higher input costs. This resilience is, in part, due to the cost cutting measures that we have implemented, including decisions to cut non-essential capital expenditure which are easily made, though placing part of our workforce on furlough or reduced hours are decisions that we do not take lightly, and so I am grateful to colleagues for their understanding and commitment.

As Lucio details in his statement, the broader economic impact of denying the VAT refunds is significantly greater than the VAT amounts being withheld and this will only shrink Ukrainian industry and the fiscal and economic contributions that we collectively provide.

Looking to our results for the first half in more detail, although sales volumes were relatively flat reflecting the strong first quarter, revenues decreased 17% to US$453 million, reflecting lower realised market prices and concentrate taking up a bigger portion of the product mix. The deep cost-cutting measures that we implemented helped to drive down our costs on a unit basis, buoyed by improvements in freight rates. As we guided when we released our annual results, the Group recorded a non-cash impairment loss, totalling US$154 million. The impairment relates to the suspension of VAT refunds and the impact on the Group's long-term model to reflect the lower expected cash flow generation which, in turn, has a negative impact on the carrying value of the Group's assets in the future. Adjusting for the impairment, the underlying EBITDA for the period was US$3.9 million, which, in the face of so many challenges, is a resilient outcome. During the period, we significantly reduced our CapEx programmes, with investments decreasing to US$28 million, compared to US$55 million in the same period in 2024. The significantly lower operating cash flow generation could, however, only be partially offset by this and as a result, the closing balance of cash and cash equivalents decreased from US$101 million at the end of 2024 to US$52 million as at 30 June 2025."

Summary financial performance

Health, safety and wellbeing

· The safety and wellbeing of the Group's workforce is the highest priority, and the Group continues to take extensive measures to protect its workforce, their families and local communities.

· During the first half, the Group reported a Lost Time Injury Frequency Rate ("LTIFR") of 0.56, marginally above the historic five-year trailing average of 0.52. The Group is proud to report zero fatalities for the period, and over a total of 58 months.

Iron ore markets

· The benchmark 65% grade iron ore price weakened throughout the first half of 2025 to close US$11 lower at US$104 per tonne.

· With continued access to Ukrainian Black Sea ports, 16 vessels were loaded in the first half permitting 60% of all sales to seaborne customers, with the balance of sales transported 35% by rail and 5% by river barge. Ongoing geopolitical disruption in the Middle East however has kept freight rates both volatile and high.

Operations and marketing

· During the first half of the year, the Group operated two out of four pelletising lines in the first quarter, and one line in the second quarter, in addition to a dedicated concentrate line.

· Total commercial production of 3,393 thousand tonnes was achieved, 7% higher than the preceding six months and 9% lower than the same period last year.

· The combined production of a range of Ferrexpo pellets totalled 2,170 thousand tonnes, combined with concentrate production of 1,223 thousand tonnes, the majority of which were produced in the first quarter.

· Focus on higher-grade iron ore production continued during the first half, with all pellets and concentrates grading 65% iron ore content or above. Production and sales of FDP pellets also resumed.

· Sales volumes totalled 3,807 thousand tonnes, comprised of pellets and commercial concentrate. This represents a 28% increase compared to the previous six months to December 2024 and flat compared to the first six months of 2024.

· The Group's C1 Costs decreased to US$77.1 per tonne in 1H 2025, due to reduced mining activities, the effects from lower fuel prices and consumption, as well as from lower maintenance and the reduction in personnel costs.

· CapEx was deliberately reduced by limiting spend on development projects and only funding necessary sustaining capital projects. Total CapEx reduced to US$28 million (1H 2024: US$55 million).

Environment, social and governance

· During the first half, the Company was forced to cut back on its humanitarian and CSR efforts due to limited funds. The Group does however continue to keep employment open for returning veterans.

· Scope 1 and 2 absolute and unit emissions fell reflecting a decrease in diesel consumption from the mining fleet and less natural gas in the pelletising facilities as concentrates made a bigger part of the Group's product mix.

· Later in the year, the Group intends to release its annual 'Responsible Business Report' for 2024.

Corporate governance

On 22 May 2025, Ferrexpo held its 2025 Annual General Meeting ("AGM"), at which the majority of the resolutions were passed. However, more than 50% of the independent shareholder votes were cast against the re-election of one of the Company's Independent Non-Executive Directors. Consequently, Ferrexpo announced that the Board intends to consult and engage with shareholders to better understand the reasons behind these votes and put the matter to a second vote of all shareholders within 120 days of the AGM.

On 11 January 2025, Non-executive Director Natalie Polischuk resigned from the Board of Ferrexpo Plc with immediate effect. Natalie was Chair of the Health, Safety, Environment and Communities ("HSEC") Committee, a member of the Audit Committee and a member of the Committee of Independent Directors.

On an interim basis, Fiona MacAulay, Senior Independent Non-executive Director was appointed a member of the Audit Committee and also appointed as a member of and will Chair the HSEC Committee.

Following Ms Polischuk's resignation, the Board continues to have a majority of independent Non-executive Directors. As previously announced, the Company has an ongoing process to search for a new independent Non-executive Director and as part of this search, the Company will also take into account ethnic and gender diversity on the Board.

For further information please contact:

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 products, which are 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 pellets. The Group has a global customer base comprising of premium steel mills around the world. For further information, please visit www.ferrexpo.com.

Notes:

Please note that numbers may not add up due to rounding. In reporting financial performance, financial position and cash flows, reference is made to Alternative Performance Measures ("APMs") that are not defined or specified under International Financial Reporting Standards ("IFRSs"). APMs are not uniformly defined by all companies, including those in the Group's industry. Accordingly, the APMs used by the Group may not be comparable with similarly titled measures and disclosures made by other companies. APMs should be considered in addition to, and not as a substitute for or as superior to, measures of financial performance, financial position or cash flows reported in accordance with IFRSs. Ferrexpo refers to the following APMs in the Group's Interim Results: C1 Cash cost of production, Underlying EBITDA, Net cash/(debt), Capital investment, and Total Liquidity. Full definitions of the Company's APMs can be found in the Annual Report & Accounts.

Introduction

The war in Ukraine, now in its fourth year, continues to dominate Ferrexpo's workforce and operations.

At the end of June 2025, 738 colleagues were serving in the Armed Forces of Ukraine, more than at any time since the start of the full-scale war. Tragically, as at the end of June 2025, 47 of our colleagues have been killed serving in the Armed Forces since the start of the full-scale invasion in February 2022. We mourn their passing and honour their selfless and brave strength. As at the end of June 2025, 186 colleagues had been demobilised from the Armed Forces, of whom 98 have completed the veteran rehabilitation programme of whom 78 have returned to work.

It is important to recognise that our workforce is operating in extremely challenging conditions. Loved ones, friends and colleagues are serving in the Armed Forces, whilst they are living and working under a constant threat of aerial attack. The number of drone and missile attacks have escalated sharply in frequency and intensity in the Poltava region this year.

The health and safety of our workforce is paramount, as is the social contribution that we can offer in our communities, and to Ukraine as a whole. Sustaining employment in as safe a manner as possible supports livelihoods and helps foster more resilient communities better weather the challenges of a prolonged war.

Since the full-scale invasion of Ukraine in February 2022, Ferrexpo has significantly changed the way it operates. The lack of access to Ukrainian Black Sea ports until the end of last year forced us to pivot our sales towards European customers via rail. Concurrently, the business was right sized to operate at lower production levels due to logistics constraints. The business also had to adapt to constant new challenges, including conscription, establishing alternative procurement channels for important inputs and interruptions to energy supplies. Rising to the challenges has resulted in a business that is adaptive to change and flexible in how it can meet its customers' needs. It is in itself a demonstration of resilience that is testament to the hard work and determination of our people.

Sales volumes totalled 3.8 million tonnes, comprised of pellets, commercial concentrate and pellet feed. This represents a 28% increase compared to the previous six months to December 2024 and an 1% decrease compared to the first six months to June 2024.

The Group continued to benefit from access to Ukrainian Black Sea ports to export its products by sea to customers in Asia and the MENA region, and to customers in Europe who prefer deliveries by sea instead of by rail or river barge. In total 60% of the sales were exported by sea during the period compared to 53% in the previous six months and 47% in the same period last year.

In total, 16 vessels were loaded with Ferrexpo cargoes from Ukrainian ports during the period under review. Of total sales, 50% were to Asian customers, 38% to European customers and the balancing 12% to customers in the MENA region.

Sales volumes increased compared to the previous six months though were flat compared to the same period last year. However, the 65% Fe iron ore index fell 10% over the period resulting in revenue of US$453 million, an 18% increase compared to previous six months, and a 17% decrease compared to the same period last year when iron ore prices were significantly higher. As published in the Annual Report and Accounts in April 2025, the Group recorded a non-cash impairment loss, which totalled US$154 million. Adding back the impairment, the underlying EBITDA for the period was US$3.9 million, which is considered a resilient performance. The Group's result for the first half of 2025 amounts to a loss of US$196 million, mostly attributable to the impairment loss. This compares to a profit of US$55 million in the same period in 2024.

For a detailed review of iron ore markets, see the section 'Sales and Marketing Review' below and for the Group financials, see the 'Financial Review' section.

Outlook

The outlook for the second half of 2025 is challenging. During the second quarter of the year, management moved hard and fast to streamline the business to a sustainable basis by building operational resilience and preserving cash. This strategy has resulted in a situation where the business is performing financially on a marginally positive EBITDA basis. In July iron ore prices staged a small recovery, with the 65% Fe benchmark averaging US$116 per tonne in the final week of July 2025, 12% higher than the price at the start of the month. These prices provide some comfort; however, without the refund on VAT that is owed to us, the business will need to continue operating at reduced levels. Representations are being made to the Ukrainian authorities to restore VAT refunds, in addition to other international stakeholders.

Should this be secured, the ambition is to add back capacity, return those on reduced hours and furlough back to the workplace, and increase the social and economic contributions to Ukraine.

Shareholder returns

Given the reduced financial liquidity of the Group, the Board of Directors have elected not to declare an interim dividend for 2025 at this time because this would affect the Group's ability to continue as a going concern as disclosed in Note 2 Summary of material accounting policies and Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements.

Sales and Marketing Review

Iron ore supply, demand and prices

Following the seasonal rally in iron ore prices towards the end of last year, prices drifted lower through the first half of 2025, with the benchmark 65% Fe price closing 10% lower at the end of the period.

Iron ore prices (US$/t)

The first quarter of 2025 saw a moderately elevated price environment for iron ore due to weather-related supply disruptions from major exporting countries, Australia and Brazil. This resulted in some tightening of supplies at a time when seasonal restocking in China ahead of the Chinese New Year holiday was underway. This was also supported by mid-to-high grade price spreads on iron ore averaging US$13 per tonne at the time.

In the second quarter of 2025 however, the major iron ore producers ramped up exports, incentivised by favourable weather conditions and a relatively subdued freight market. Despite good demand and higher levels of steel production levels in China as the peak construction season approached, the growth in supply outweighed the seasonal demand peak, putting pressure on prices, evidenced in a 7% fall in the benchmark 65% Fe price and the 62 - 65% Fe spreads narrowing by 20%.

Industry commentators have been quick to note signs of improvement in July, which is reflected in our continued sales to China, however, the outlook remains uncertain.

Pellet premiums

Pellet premiums remained suppressed in the first half of 2025 as idled capacity from large pellet exporters globally came back online, resulting in increased supply pressure on the market. Combined with relatively lacklustre demand in the Atlantic blast furnace markets, the Atlantic pellet premium in the first half of 2025 fell to five-year lows; while suppressed steel margins in China failed to support pellet premiums in Asian markets.

Following a sustained period of lower pellet premiums, a reduction in pellet exports is expected in the second half following announcements of capacity cuts by some large players which could result in tighter supply and lend some support to pellet premiums.

Customer development

The Group has continued to export via Ukrainian Black Sea ports since access was restored in late 2023. Responding to relatively stronger demand for high-grade pellet feed concentrate in Asia, the Group once again demonstrated flexibility by increasing concentrate production and fixing 11 capesize vessels to Asia (out of a total 16 vessels) during the period, compared to just four in the same period last year.

Improvements in product specifications enabled by quality improvement projects at site has also allowed the Group to continue expanding its sales of FDP to new customers in the Middle East region in the first half of 2025, further developing its footprint in the low-emissions direct reduction steelmaking sector.

Freight

The C3 freight rate (Capesize freight rate from Brazil to China), is used as a reference when pricing the Group's sales. C3 rates in the first half 2025 remained relatively low at US$20 per tonne (1H 2024: US$26 per tonne) due to weather-related supply disruptions in Brazil. It is also interesting to note that as the perceived risks around shipping from Ukraine ease, the Group has observed a material decrease in freight rates shipping from Ukraine relative to international freight benchmarks, as more ship owners express interest to operate this route.

FINANCIAL REVIEW

Ongoing legal disputes and new adverse actions in Ukraine with significant impact on the Group's business activities and cash flow generation in the first half of 2025

Summary

Despite the unpredictable situation in Ukraine due to the ongoing war, the Group showed strong momentum at the beginning of the year, resulting in the Group's best quarterly production in the first quarter since the full-scale invasion in February 2022. This strong momentum was, however, significantly curtailed in the second quarter as the Group started to experience the full impact of the Ukrainian tax authorities' decisions to suspend the refund of VAT to the Group's Ukrainian subsidiaries.

In response to the rejection of VAT refunds, the Group adjusted its production volumes in the second quarter to minimise the negative impact on the Group's cash flow and available cash equivalents. Lower production volumes resulted in lower sales volumes, which has an adverse effect on the Group's profitability and cash flow generation.

The Group reported a loss for the first half of 2025 of US$196 million, which includes an impairment in the amount of US$154 million on the Group's non-current operating assets recorded as at 30 June 2025. The impairment primarily results from a non-adjusting post balance sheet event, which was disclosed in the Group's 2024 Annual Report & Accounts.

In the first quarter of 2025, the Group operated an average of two pellet lines, reducing to a single pellet line for reasons described above in the second quarter. This affected the Group's production costs on a per tonne basis. Throughout the second quarter, the Group worked extensively to lower its cost base to remain financially viable. This included placing approximately 37% of employees on reduced working time or on furlough, further cuts in procurement of goods and services and a suspension of all non-essential capital expenditures.

The index prices for 65% Fe iron ore fines averaged US$113 per tonne in the first quarter on a similar level as in the fourth quarter 2024, before weakening by approximately 8% in the second quarter, due to increased supply and concerns about global trade. This ultimately affected realised margins and cash flow generation.

The Group ended the first half of 2025 with a net cash position of US$50 million (31 December 2024: US$101 million). The capital expenditures for the first half of 2025 totalled US$28 million, significantly less than the US$55 million in the same period last year.

Key Financial Performance Indicators

Revenue

Revenue decreased by 17% to US$453 million in the first half of 2025 (1H 2024: US$549 million), primarily due to lower realised prices and marginally lower sales volumes. Whilst total sales volumes were 42 thousand tonnes lower at 3.8 million tonnes, there was a significant shift in the ratio of pellets to concentrate produced as the Group responded to strong Chinese demand for its high-grade low-alumina iron ore concentrate. As a result, concentrates represented 32% of the Group's sales in the first half of 2025, three times more than in the same period a year ago. Revenue in the first half of 2025 was therefore primarily affected by a 14% decline in the average benchmark iron ore price (65% Fe) and a 15% drop in the average Atlantic pellet premium. At the same time, the average index rates for international freight decreased by 22% to US$20.1 per tonne compared to US$25.8 per tonne in the same period in 2024. The net effect of changes index prices, pellet premiums and freight rates lowered the Group's net back realised prices for sales under the International Commercial Terms ("Incoterms") of FOB ("Free on Board").

The Group continued to benefit from the availability of the Ukrainian Black Sea ports and seaborne sales remained stable at 2.1 million tonnes.

Iron ore prices

The changes of iron ore fines prices in the first half of 2025, compared to the same period in 2024, are reflecting a balance between cautious demand and ample supply. The demand is currently affected by ongoing trade tensions and increased barriers to trade on steel. This effect is exacerbated by high port stockpiles, reducing the urgency to restock, and increasing production volumes in Australia and Brazil ahead of new projects in other countries that will become operational soon. As a result, the overall supply growth outpaced the demand in the first half of 2025. This is also likely to be the case in the second half of 2025, as possible fiscal or economic measures will not be able to offset the ongoing structural weakness of the steel and property sector.

For more information on the market factors influencing pricing of the Group's products and logistics, please see the Market Review section.

C1 cash cost of production

Cost of sales in first half of 2025 totalled US$311 million, compared to US$314 million in the same period in 2024. The decrease is mainly due to the lower total production as result of the rejection of VAT refunds in Ukraine, so that the Group had to adjust its production volumes in the second quarter to minimise the negative impact on the Group's cash flow and available cash balance. The total production volume for pellets and concentrates decreased by 9% to 3.4 million tonnes, compared to 3.7 million tonnes in the comparative period last year. Because of the rejected VAT refunds and changing market conditions, the Group assessed and adjusted its production split to generate the best possible returns under the changed circumstances. This resulted in a decrease of the volume of pellets produced by 34% to 2.2 million tonnes (1H 2024: 3.3 million tonnes), and an increase of the volume of concentrate produced by 184% to 1.2 million tonnes (1H 2024: 0.4 million tonnes). As in previous years since the start of the full-scale invasion of Ukraine, the Group's production costs are still affected by higher prices for raw materials such as gas and electricity, whereas the Group benefited from lower fuel prices as well as an overall cost reduction programme.

In the first half of 2025, the Group continued focusing on lowering its cost base to remain financially viable. As a result, production was downscaled from an average of two pellet lines in the first quarter to a single line in the second quarter. As a result, approximately 37% of employees were placed on reduced working time or on furlough, and further cuts were made to the Group's repair and maintenance programme and its mining operations.

The C1 cash cost of production ("C1 costs") reflects the Group's operating costs for the production of iron ore pellets, with a breakdown of the different cost components shown in the table below.

The Group's average C1 costs decreased to US$77.1 per tonne in the first half of 2025, compared to US$78.8 per tonne in same period in 2024. The total costs per tonne were lower, principally due to reduced mining activities, the effects from lower fuel prices and consumption, as well as from lower maintenance and the reduction in personnel costs. These cost efficiencies were partially offset by higher prices for electricity, gas and materials, further affected by a slight appreciation of the local currency in Ukraine to the US dollar.

The main C1 costs drivers are the prices of electricity, natural gas and diesel, which are outside of the Group's control and still affected by the ongoing war in Ukraine. The Group continued to experience a sharp increase in electricity prices due to the currently weak power generation and distribution facilities in Ukraine as a result of continued Russian attacks. The decreased mining and maintenance activities in the first half of 2025 resulted in a lower proportion of diesel consumption and repair costs. Another important component of the Group's C1 costs that is also outside of the Group's control relates to royalties in Ukraine, which accrue and are paid based on a tiered system. According to this regime, royalties are calculated based on the benchmark index price for a medium-grade (62% Fe) iron ore fines price and computed based on the cost of different iron ore products. The rate varies between 3.5%, 5.0% and 10.0% depending on the benchmark index price for 62% Fe. The royalty expense totalled US$14 million in the first half of 2025, compared to US$20 million in the same period in 2024, driven mainly by the lower production volume and the effect of lower average index prices in the first half of 2025.

Group operating costs, denominated in Ukrainian hryvnia ("UAH"), account for approximately two thirds of the Group's C1 costs. Consequently, changes in hryvnia to dollar rates can have a significant impact on the Group's operating costs, including the C1 costs. Historically, the Group's C1 costs benefited from a devaluation to the US dollar, whereas in the first half of 2025, the UAH marginally appreciated to the US dollar, compared to a devaluation of 7% in the same period in 2024, putting additional pressure on the Group's C1 costs.

The Group's C1 costs per tonne represent the cash cost of the production of iron pellets from ore, divided by the production volume. The C1 costs exclude non-cash costs such as depreciation, pension costs and inventory movements. Following the sharp increase of the volume of concentrate produced in the first half of 2025, the computation of the C1 costs per tonne was amended so that only the costs related to the pellet production are divided by the volume of produced pellets, whereas the computation of C1 costs per tonne of the comparative period was based on the total costs divided by the volume of produced pellets. The C1 cash cost of production (US dollars per tonne) is regarded as an Alternative Performance Measure ("APM").

Breakdown of C1 costs

The Group's business is very energy intensive, and the main C1 costs components are electricity, natural gas and diesel, which collectively represent 49% (1H 2024: 45%) of the total cost base as presented in the chart below with changes and the proportions of the different cost components.

In the first half of 2025, the proportion of C1 costs per tonne for electricity increased by 7% to 34% (1H 2024: 27%), as the effect from higher electricity prices was exacerbated by the lower production volume. The average electricity price in Ukraine in the first half of 2025 increased by 28% in US dollar terms to an average of US$147 per megawatt-hour ("MWh"), peaking at US$173 per MWh in February 2025, then steadily decreasing in the second quarter to US$136 per MWh in June 2025. This compares to an average of US$115 per MWh in the first half of 2024. The proportion of natural gas increased to 9% (1H 2024: 7%) due to higher prices on the global markets, partially offset by lower consumption due to an increase in the production of concentrates resulting in less gas being required for pelletising, whereas the proportion of fuel decreased from 11% in the first half of 2024 to 6%, mainly due to the Group's decreased mining activities in the first half of 2025. The average prices for oil (Brent) and natural gas, both in US dollar terms, were 8% lower and 32% higher in the first half of 2025, compared to opposite effects of 4% higher and 23% lower in the first half of 2024.

The increase in the proportion for materials from 13% in the first half of 2024 to 17% in the first half of 2025 is mainly due to a higher volume of concentrate purchased from third party suppliers, as well as the effects of local inflation and the marginal appreciation of the Ukrainian currency. The slight decrease in the proportion of personnel expenses from 9% in the first half of 2024 to 8% in the first half of 2025 is largely driven by the increased proportion of employees placed on reduced working time or on furlough, partially offset by adjustments increases in salaries and the payment of bonuses made to the workforce in Ukraine.

Due to the ongoing war in Ukraine and the absence of VAT refunds, which have led to lower production volumes, the Group reduced its maintenance and repair programme for its mining and processing equipment compared to the first half of 2024. See section "C1 cash cost of production" for further information on the Group's production costs.

C1 Costs breakdown

The numbers above are rounded to full decimals

Selling and distribution costs

Total selling and distribution costs decreased to US$133 million in the first half of 2025, compared to US$148 million in the same period in 2024, primarily driven by lower freight tariffs on seaborne sales. Seaborne logistics routes are generally the lowest cost and most efficient way to deliver the Group's products to customers. During the first half of 2025, the index rates for international freight averaged 22% lower at US$20.1 per tonne compared to US$25.8 per tonne in the same period in 2024. The Group's seaborne sales, mainly under CFR ("Cost and Freight") and CIF ("Cost, Insurance and Freight") Incoterms, remained stable at 2.1 million tonnes, as the Group continued to benefit from access to Ukrainian Black Sea ports. However, in the first half of 2024, this volume included 0.3 million tonnes sold under FOB ("Free on Board") terms, where the customer bears responsibility for the freight (1H 2025: nil). As a result of the generally lower freight rates, partially offset by a higher proportion of shipments under CFR and CIF Incoterms, the Group's international freight costs decreased to US$70 million, compared to US$74 million during the same period in 2024. In addition to the international freight costs, the Group's selling and distribution costs are also dependent on the level of domestic Ukrainian logistics costs, such as railway tariffs and port charges. In general, the Group's logistics costs continue to be affected by the ongoing war in Ukraine, including higher insurance premiums than before the war. However, the Group benefited from a decrease of the insurance premiums in the first half of 2025, also due to rebates as a result of the volumes insured in 2024, resulting in a decrease of the freight insurance costs to US$1 million, compared to US$5 million in the same period in 2024.

The Ukrainian rail network is essential to delivering the Group's products to Black Sea ports and to the Western border of Ukraine. Following war-related congestions in 2022 and 2023, the situation continued to improve in 2024 and 2025 and rail tariffs in Ukraine remained unchanged during the first half of 2025, compared to the rates during the financial year 2024. A hefty 70% increase of the rail tariffs was imposed in July 2022, and a potential new increase are being touted, without a decision made as at the approval of these interim condensed consolidated financial statements.

General and administrative expenses

General and administrative expenses in the first half of 2025 decreased to US$31 million, compared to US$32 million in the same period in 2024. Following the rejection of the VAT refunds, the Group worked extensively throughout the second quarter of 2025 to lower its cost base. Measures taken include placing approximately 37% of employees in Ukraine on reduced working hours or furlough. General and administrative expenses also include legal and consulting costs totalling US$8 million (1H 2024: US$9 million), which are in connection with ongoing legal proceedings against the Group in Ukraine.

See Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements for the current environment in Ukraine facing the Group, and further information on the ongoing legal challenges and disputes of the Group in Ukraine.

Other operating expenses

Other operating expenses increased to US$166 million in the first of half 2025, compared to US$14 million in the comparative period in 2024. This increase is predominantly due to a non-cash impairment loss of US$154 million recorded as at 30 June 2025 on the Group's non-current operating assets, including property, plant and equipment, intangible assets and other non-current assets, which was allocated to various asset categories within property, plant and equipment. The recorded impairment loss was expected as disclosed in the Group's 2024 Annual Report & Accounts as a non-adjusting post balance sheet event in relation to the rejection of VAT refunds in Ukraine. As a result, the Group adjusted its production plan to mitigate the effect from VAT related working capital outflows and to preserve its available cash balance, affecting also the Group's cash flow generation, which forms the basis of the impairment test.

Currency

Ferrexpo prepares its accounts in US dollars. The functional currency of the Group's operations in Ukraine is the Ukrainian hryvnia, as approximately two thirds of the Group's operating costs are historically denominated in local currency.

The local currency appreciated marginally from 42.039 at the beginning of 2025 to 41.641 as at 30 June 2025, with an average exchange rate of 41.631 in the first half of 2025 (1H 2024: 39.009).

With the continuation of Martial Law in 2025, the National Bank of Ukraine ("NBU") has continued to maintain significant currency and capital controls to manage the local currency. As a result, there are limitations to converting balances in local currency into US dollars, and to transferring US dollars between onshore and offshore accounts of the Group.

See Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements for further information.

[1] Source: National Bank of Ukraine

Operating and non-operating foreign exchange losses/gains

The functional currency of the Ukrainian subsidiaries is the hryvnia. Historically, the devaluation of the hryvnia against the US dollar resulted in foreign exchange gains on the Group's Ukrainian subsidiaries' US dollar denominated receivable balances from the sale of iron ore products. In the first half of 2024 the local currency in Ukraine slightly appreciated against the US dollar resulting in operating foreign exchange losses of US$7 million, compared to gains of US$55 million in the same period in 2024, when the hryvnia depreciated.

Non-operating foreign exchange gains of US$8 million in the first half of 2025, compared to losses of US$25 million in the same period of 2024, also due to the appreciation of the hryvnia and primarily relating to the translation of US dollar denominated loan payable balances of the Group's Ukrainian subsidiaries.

For further information on the operating foreign exchange gains and the non-operating foreign exchange losses, please see Note 6 Foreign exchange gains and losses to these interim condensed consolidated financial statements.

Underlying EBITDA

The Group's underlying EBITDA remained positive at US$4 million for the first half of 2025, despite the loss for the period, although this is significantly lower than in the same period in 2024 (1H 2024: US$79 million). The sharp decline is mainly due to lower operating profits resulting from the adjusted lower production plan following the rejection of VAT refunds in Ukraine and lower realised prices, which could not be offset by the effects from lower C1 production costs and the further cost-cutting measures initiated by the Group during the second quarter of 2025.

Underlying EBITDA is an Alternative Performance Measure ("APM").

Net finance expense

The Group's finance expenses in the first half of 2025 remained stable at US$2 million, compared to the same period in 2024.

With the exception of lease liabilities, the Group does not have any outstanding interest-bearing loans and borrowings, therefore no interest expenses on finance facilities were incurred. As in the prior year, the majority of finance expense relates to the calculated interest on the Group's pension scheme, without any cash outflow effects, and to bank charges. At the same time, interest income decreased from US$2 million in the first half of 2024 to US$1 million in the first half of 2025. Interest income is derived from the available funds invested in deposits and depends on interest rates on the global financial markets and the funds invested.

Further details on finance expense are disclosed in Note 7 Net finance expense to these interim condensed consolidated financial statements.

Income tax

The Group's income tax expense decreased to US$9 million, compared to US$20 million in the same period in 2024. The lower income tax expense is due to the fact that some of the Group's subsidiaries realised losses in the first half of 2025. The income tax expense also includes the effect of an additional allowance of US$3m recorded on deferred tax assets recognised in Ukraine. The Group's overall loss position is due to a significant impairment loss recorded as at 30 June 2025 on the Group's non-current assets, which is mainly allocated to the Group's operations in Ukraine and required downscaling of the Group's operations. Both effects are the result of the adjusted production plan following the rejection of VAT refunds in Ukraine, affecting the Group's cash flow generation and profitability.

The effective tax rate as of 30 June 2025 is affected by the additional impairment loss of US$154 million on the Group's non-current operating assets, which is primarily allocated to the Group's operations in Ukraine, and the effect from extracted low grade ore totalling US$12 million, which are both not tax deductible in Ukraine. As a consequence, there is no deferred tax effect recognised as it was done in the past.

The effective tax rate for the first half of the 2025 financial year was positive at 4.9% and therefore not comparable to previous periods. The reason for the positive effective tax rate is that the Group is in a loss position even before the significant impairment charge and no deferred tax assets on the resulting tax loss carry forwards were recognised, as it is currently uncertain whether the Group's subsidiaries in the various countries will be able to benefit from them in the near future.

The lower production volumes affecting the Group's overall profitability also had an adverse impact on the taxes to be paid in the different jurisdictions, but mainly in Ukraine. As a result of the lower profitability in the different jurisdictions, the income tax paid by the Group decreased to US$3 million, compared to US$13 million in the same period in 2024, of which US$10 million was paid in Ukraine. The income tax paid in the first half of 2025 includes withholding tax on intercompany interest payments totalling US$1 million (1H 2024: US$2 million), to be considered as income tax payments and paid in Ukraine. Further details on taxation are disclosed in Note 8 Taxation to these interim condensed consolidated financial statements.

Items excluded from underlying earnings

In addition to the usual adjustments made to the underlying EBITDA, the figure for the first half of 2025 was adjusted as at 30 June 2025, considering the non-cash effect of the US$154 million impairment loss. The impairment loss was to be expected and results from a non-adjusting post balance sheet event, which was disclosed in Note 35 Events after the reporting period included in the Group's 2024 Annual Report & Accounts.

See Note 10 Property, plant and equipment to these interim condensed consolidated financial statements for further details.

Loss for the half year

The Group's result for the first half of 2025 amounts to a loss of US$196 million, mostly attributable to the US$154 impairment loss. This compares to a profit of US$55 million in the same period in 2024. The loss is also attributed to lower pellet sales volumes and lower iron ore prices and higher prices for energy and key consumables.

Cash flows and cash equivalents

Operating cash flow before changes in working capital decreased by 94% to US$5 million, compared to US$82 million in the same period in 2024. The lower operating cash flow generation is the result of the adjusted production plan following the rejection of VAT refunds by the Ukrainian tax authorities since March 2025. In terms of the working capital, there was an overall outflow of US$24 million, compared to US$12 million in the same period in 2024. The net outflow was largely driven by an increase in the trade receivables balance due to increased sales volumes in June 2025, whereas the decrease of inventories and the increase of taxes recoverable are linked to the adjusted production plan mentioned above. Since March 2025, the Group's subsidiaries in Ukraine did no longer receive VAT refunds, resulting in a sharp increase in the outstanding VAT balance as at 30 June 2025 and further increases are to be expected until VAT refunds resume.

The net cash flow from operating activities was negative at US$24 million, compared to positive at US$56 million in the same period in 2024. The effect from the lower operating cash flow was accentuated by working capital outflows as at 30 June 2025.

During the first half of 2025, the Group significantly reduced its capital expenditure programme, with investments decreasing to US$28 million, compared to US$55 million in the same period in 2024. See the Capital investment section below for further information.

The significantly lower operating cash flow generation could only be partially offset with the initiated decrease of capital expenditures. As a result, the closing balance of cash and cash equivalents decreased to US$52 million as at 30 June 2025, compared to US$106 million as of 31 December 2024.

The balance of cash and cash equivalents held in Ukraine amounts to US$2 million as at 30 June 2025 (31 December 2024: US$4 million). Following the adoption of Martial Law in Ukraine, currency and capital control restrictions were introduced in Ukraine by the NBU, which are still in place. Although these measures were softened by the regulator in 2024, they are still affecting the Group in terms of its ability to make cross-border payments, which may be carried out only in exceptional cases.

For further information see Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements.

Capital investment

Capital expenditure in the first half of 2025 totalled US$28 million compared to US$55 million in the same period in 2024. Of the total amount spent in the first half of 2025, sustaining and modernisation capital expenditure totalled US$15 million (1H 2024: US$19 million), covering the activities of all of the Group's major business units, and investments in strategic development projects totalled US$13 million (1H 2024: US$36 million). The significant decrease of the capital expenditures reflects the Group's extensive work to reduce all non-essential capital expenditures following the rejection of VAT refunds by the tax authorities in Ukraine since March 2025.

Since the beginning of the war, the Group continuously reviewed and optimised the level and timing of its capital expenditure programme to ensure the reliability of operations in Ukraine and to avoid unexpected downtimes. The recent rejection of VAT refunds required more extensive cuts, albeit primarily for strategic development projects, whereas the sustaining and modernisation capital expenditures remained on a similar level as in the comparative period in 2024.

Following the rejection of VAT refunds, the Group significantly reduced its investments in strategic development projects, which decreased to US$13 million, compared to US$36 million in the same period in 2024. The largest capital investments included additional funds for the new press filtration complex and a new concentrate conveyer line along the production circuit, which totalled US$5 million and US$3 million, respectively. The purpose of these projects is the increase of the production of high-grade iron ore products so that the business can build flexibility into its production mix and be more nimble adapting to short-term changes in demand for different products. The Group also funded US$2 million on stripping activities for future production and US$1 million on the development and exploration at the Belanovo Mine.

Considering the fall in cash flow generation, which is affected by the rejection of VAT refunds and continued effects from the ongoing war in Ukraine, no ordinary dividends were declared or paid during the first half of the financial years 2025 and 2024. The Group has a shareholder returns policy outlining the Group's intention to deliver up to 30% of free cash flows as dividends in respect of a given year. The Group's ability to make dividend payments also depends on developments in respect of the ongoing legal disputes in Ukraine.

For further information see Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements.

Debt and maturity profile

The Group is doing everything it can to maintain a robust balance sheet, being essentially debt free, with a net cash position of US$50 million as at 30 June 2025 (31 December 2024: US$101 million). With the exception of lease liabilities, the Group did not have any outstanding interest-bearing loans and borrowings as of 30 June 2025 and 31 December 2024.

As of 30 June 2025, the credit rating agency S&P had a corporate and debt rating for Ferrexpo of CCC, with a negative outlook. The credit ratings agency Moody's had a long-term corporate and debt rating for Ferrexpo of Caa3, with a negative outlook. The credit ratings agency Fitch maintains a CCC- with a negative outlook rating for the Group. While the credit rating of Ferrexpo is capped by the sovereign credit rating of Ukraine, the ceilings for credit ratings ascribed to Ferrexpo by S&P, Moody's and Fitch are higher (four notches above sovereign, SD, for S&P, one notch above sovereign, Ca, for Moody's and three notches above sovereign, RD, for Fitch).

Related party transactions

The Group enters into arm's length transactions with entities under the common control of Kostiantyn Zhevago and his associates. All these transactions are considered to be in the ordinary course of business.

During the first half of 2025, the Group made a bail payment of UAH5 million (approximately US$120,000) (1H 2024: US$1 million) on behalf of one member of the top management (1H 2024: one) of one of the Group's subsidiaries in Ukraine in respect of various legal actions and ongoing court proceedings initiated by certain governmental bodies against the Group's subsidiaries and members of the senior management in Ukraine.

See also section below, Note 19: Contingent liabilities and legal disputes and Note 21 Related party disclosures to these interim condensed consolidated financial statements for further details.

Contingent liabilities and legal disputes

The Group is exposed to risks associated with operating in a challenging environment in Ukraine during a time of war and the current circumstances facing Mr Zhevago. As a result, the Group is subject to various legal actions and ongoing court proceedings initiated by different government agencies in Ukraine. There is a continued risk that the independence of the judicial system, and its immunity from economic and political influences in Ukraine may not be upheld. Consequently, Ukrainian legislation might be applied inconsistently to resolve the same or similar disputes. As a result, the Group is exposed to a number of higher risk areas than those typically expected in a stable economy, which require a significant portion of critical judgements to be made by management.

In respect of the ongoing contested sureties claim before the Supreme Court of Ukraine, several court hearings took place in the first half of 2025 without a final Supreme Court ruling. As at the date of the approval of these interim condensed consolidated financial statements, the date of the next hearing is scheduled for 8 September 2025. If the final Supreme Court ruling is not in favour of Ferrexpo Poltava Mining ("FPM"), the claimant may take steps to appoint either a state or a private bailiff and request the commencement of enforcement procedures, which could have a material negative impact on the Group's business activities and its ability to continue as a going concern, as the assets of FPM could be seized or subject to a forced sale. In connection with the contested sureties claim, the counterparty filed an application for bankruptcy of FPM and a hearing scheduled for 24 July 2025 in respect of that application was postponed. A further hearing is yet to be scheduled. In the event of a possible negative decision by the court of first instance, the Group will appeal. In the meantime, it is currently not possible to assess the potential impact of such bankruptcy proceedings and their timing, as these depend on further court proceedings, which may extend over a considerable period of time.

As announced on 4 February 2025, the Group's subsidiary FPM has received information that a civil claim was filed seeking joint liability of FPM and its General Director for damages amounting to UAH157 billion (approximately US$3.8 billion as at 1 August 2025) in favour of the Ukrainian state. This claim is related to an initial accusation of the illegal sale of waste products, as disclosed in the Group 2023 Annual Report & Accounts, which have evolved into accusations that FPM is illegally mining and selling subsoil (minerals other than iron ore), which is said to have caused damage to the environment. FPM rejects these allegations in their entirety on the basis that there was no illegal extraction of the subsoil. Management is of the opinion that these accusations and the claim are without merit and FPM has started the vigorous defence of its position in the Ukrainian courts. Even if a court in Ukraine would conclude that there was illegal mining and sale of subsoil, the extent of this claim is in no way comprehensible, and it is the Group management's position that no reliable estimate can be made as at the date of approval of these interim condensed consolidated financial statements. As a result, and due to the absence of significant developments since the approval of the Group's 2024 annual financial statements, no provisions were recognised as at 30 June 2025 in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

Following the personal sanctions imposed on Mr Zhevago by Ukrainian authorities on 12 February 2025, local subsidiaries of the Group in Ukraine have not been receiving VAT refunds since March 2025. Although no sanctions have been imposed on any member of the Group, the personal sanctions on Mr Zhevago have implications on the Group's operation and, as a consequence, on its profitability and cash flow generation, which could have an impact on the Group's ability to continue as a going concern. In connection with the personal sanctions on Mr Zhevago, on 20 February 2025, the State Bureau of Investigation (the "SBI") made a media announcement regarding a potential claim to the High Anti-Corruption Court of Ukraine (the "HACC") to nationalise 49.5% of shares in FPM and certain of its assets.

In addition to the above cases, there is a risk of transfer of 49.5% of the corporate rights in a subsidiary of the Group in Ukraine to the Ukrainian Asset Recovery and Management Agency ("ARMA"); this is related to ongoing proceedings against Mr Zhevago.

See Note 2 Summary of material accounting policies and Note 19 Commitments, contingencies and legal disputes to these interim condensed consolidated financial statements as well as the Principal Risks section for further details.

Going concern

As at the date of the approval of these interim condensed consolidated financial statements, both the war and legal actions against the Group in Ukraine are ongoing and still pose a significant threat to the Group's mining, processing and logistics operations in Ukraine. This threat results in material uncertainties outside of the Group's control. In addition to the war-related material uncertainty, the Group is also exposed to the risks associated with operating in a challenging environment in Ukraine, which may or may not be exacerbated by the war and/or the current circumstances facing Mr Zhevago (see Ukraine country risk in the Update on Principal Risks section). As a result, the Group is exposed to a number of risk areas that are heightened compared to those expected in a stable economy, such as an environment of political, fiscal and legal uncertainties, which represents another material uncertainty as at the date of approval of these interim condensed consolidated financial statements. As mentioned in the section Contingent liabilities and legal disputes above, there are a number of legal actions against the Group in Ukraine, which had to be assessed by the management also in terms of the Group's ability to continue as a going concern and required critical judgements.

Detailed information on the Group's ability to continue as a going concern and material uncertainties are disclosed in Note 2 Summary of material accounting policies to these interim condensed consolidated financial statements.

Nikolay Kladiev

Chief Financial Officer, Ferrexpo plc

Operational review

Health and safety

Despite the ongoing war in Ukraine, Ferrexpo continues to maintain a good safety record, with zero fatalities since August 2020. The Group recorded a 6-month lost time injury frequency rate ("LTIFR") of 0.56, higher than the average 0.54 for 2024 due to a lost-time injury in January when an employee received a slight injury to his finger when holding a waste container.

Group and subsidiary six-month LTIFR

Otherwise, the Group has maintained a low incidence of safety incidents due to multi-year projects implementing a strong safety culture at its operations, including workforce engagement, safety training and regular monitoring of leading and lagging safety indicators. During the period, an additional bomb shelter was installed for administrative employees at FPM.

Pellet production and pellet quality

During the first six months of 2025, out of its four pelletiser lines, the Group has operated two in the first quarter and one in the second quarter in addition to a parallel concentrate line. The Group announced its production for the first half of 2025 in its second quarter 2025 production report on 7 July 2025. Total commercial production for the period was 3,393,135 tonnes, comprising concentrate production of 1,223,504 tonnes and pellet production of 2,169,631 tonnes, of which FDP accounted for 81,787 tonnes. The total production for the first half of 2025 was 9% lower than the same period last year, though 7% higher than the previous six months to the end of December 2024.

The Group has continued to focus on high-grade production, with 100% of production in the period being with an iron ore content of 65% or above. The Group demonstrated agility and flexibility however, as it continued to benefit from strong demand for its high-grade low-alumina concentrates from customers in China, representing over a third of its product mix during the first half.

Iron ore products production

Marketing

With continued access to Ukrainian Black Sea ports during the first half of 2025, the Group was able to maintain exports to customers in Europe (in addition to the established rail and barge routes) and further afield to its customers in MENA and Asia.

The sales mix comprised of high-grade commercial concentrates and pellets, with concentrates predominantly sold to customers in China and pellets to customers in Europe and the Middle East.

Sales by region

Totals may not sum due to rounding

Responsible business activities

Safety

The Group is pleased to report that there were no fatalities at its operations in 1H 2025. Regrettably, however, there was an increase in the number of minor injuries reported during the period and consequently the reported injury rate ("LTIFR") increased to 0.56 which is above the five-year trailing average rate at 0.54.

Community support

Since the early stages of Russia's invasion of Ukraine in 2022, the Group has sought to utilise its position as a business in Ukraine to source and provide support throughout the communities where the Group operates. In response to the humanitarian crisis in Ukraine, the Group established the dedicated Ferrexpo Humanitarian Fund, which combined with its regular CSR activities, has operated over 100 programmes and initiatives. Regrettably, due to the suspension of VAT refunds and the resulting lower financial liquidity of the Group, only essential humanitarian efforts are being continued at the present time.

Pathway to low carbon production

Since 2023 the Group has completed an external assurance process on its Scope 1 and Scope 2 emissions. For 2024 the Group also completed the process for Scope 3 emission. This was done to build confidence around the reporting of sustainability topics. In December 2024, the Group also published its second Climate Change Report. The report represented the culmination of extensive work conducted to map out the carbon footprint of Ferrexpo and its exposure to climate change risks and opportunities, as we strive to deliver Net Zero emissions production by 2050. Three potential war-ending scenarios were analysed: continuation of war, war ending and rapid or slow adoption. The modelling identified that under the first two scenarios absolute emissions reductions exceeded SBTi requirements and our own targets, whereas the scenario of slow adoption identified that Ferrexpo would fall short of SBTi requirements but surpass our internal goals.

Greenhouse gas emissions

The principal effects on emissions include:

· Clean power purchasing. Since May 2024, the Group has been mandated to import up to 80% of its electricity, depending on domestic availability from neighbouring EU countries. This power is typically generated from carbon rich sources. Consequently, the Group's ability to locally source cleaner hydro and nuclear generated power has been reduced. This is reflected in a decreasing proportion of the Group's purchases of clean energy sources at 45% in 1H 2025 (1H 2024: 63%).

· Mining activities. Ferrexpo continues to operate its mining activities at a reduced capacity due to the war. The first quarter, however, was the best quarter for production volumes since the start of the full-scale invasion in February 2022. Operations have since downscaled in the second quarter, resulting in an overall decrease in diesel consumption by 33% compared to 1H 2024.

· Processing and beneficiation activities. With a decrease in pellet production in 1H 2025, natural gas consumption at the Group's pelletising facilities has fallen by 33% compared to 1H 2024.

The Group's Scope 3 emissions are dominated by the emissions generated by steelmakers in the conversion of iron ore to steel, with this activity representing 96% of Scope 3 emissions in 1H 2025 (1H 2024: 96%), and more than 90% of total emissions (Scopes 1, 2 and 3 combined). Ferrexpo's Scope 3 emissions footprint was 1.49 tonnes CO2 per tonne of production in 1H 2025, higher than 2024 due to a pivot toward increased pellet feed concentrate production and sales, a product which requires additional processing in the steelmaking process to produce steel, compared to pellets.

Responsible Business Report 2024

Later in the year, the Group will release its tenth annual Responsible Business Report.

Update on principal risks

Principal Risks are assessed on the basis of impact and probability and are considered to have the greatest potential effect on the business. Each Principal Risk is linked to aspects of the Group's strategy that could be affected if an event were to occur. The Group considers the Principal Risks facing the business, including the ongoing war in Ukraine since the full-scale invasion in February 2022, Ukraine country risk, counterparty risk, iron ore market and pricing risk, operating risks including health and safety, production, logistics and operating costs, information technology and cybersecurity, and climate change.

The principal risks detailed on pages 84 to 94 of the 2024 Annual Report and Accounts published in April 2025 remain relevant. An update on material developments that relate to the Group's Principal Risks since their publication in April 2025 is provided below.

In addition, the Board and management have identified three new principal risks: major shareholder risk, liquidity risk and taxation risk which are also included in the updated descriptions below.

Update since publication of Annual Report and Accounts in April 2025

Conflict risk and outlook

The primary consideration for Ferrexpo's risk profile at the present time is Russia's full-scale invasion of Ukraine, and the impact that this is having, and will continue to have, on Ferrexpo's business in Ukraine.

Since the Group published its Principal Risks in April 2025, Russian armed forces have made small advances and occupied more territories in Ukraine. Ukraine has also continued to suffer airborne attacks on civilians, energy and transport infrastructure. Attacks on civilian infrastructure in particular, have increased in frequency and intensity towards the end of the second half of 2025 and into July.

Ferrexpo's operations continue to operate, albeit with greater significant limitations on working hours due to air raid alerts and occasional disruption to power transmission. Access to Ukraine's Black Sea ports has been maintained and as long as the level of risk is acceptable, the Group will continue to use this export route.

The war in Ukraine continues to represent a significant threat to Ferrexpo's operations in Ukraine, should the war continue in its current configuration, or even escalate further. The outlook for Ukraine at present remains inherently unpredictable in the short to medium term, with a range of military, financial and other factors all having a significant influence on the outcome for the people of Ukraine and businesses deriving their revenues from Ukraine. In the near term, it is expected that the conflict will continue to put increasing strain on the economy of Ukraine, in particular, with regard to elevated electricity prices and railway tariffs.

For further information, see the sections titled Sales and Marketing Review and Financial Review in this report in addition to the Going Concern Statement above.

Ukraine country risk

It is over three years since the full-scale invasion of Ukraine. Ferrexpo's operations in the Poltava Region have not seen direct combat, however missile and drone attacks in the region are frequent. The business has remained relevant by adapting to the challenges it faces and continuing to produce and export.

At a national level, the war is placing a strain on the economy. Tax revenues have fallen while spending on the military has increased. Consequently, the government has sought to increase revenues from business. Examples include increasing railway tariffs and new laws on the repatriation of funds and currency controls.

The war places unique challenges on the business. At the end of June 2025, a total of 738 colleagues were serving in the Armed Forces of Ukraine, more than at any time since the start of the full-scale invasion. Those in the workplace are enduring psychological stress. The working day is frequently interrupted by air raid alerts. Damage to energy infrastructure has forced the need to import electricity at higher tariffs. Supply chain disruptions have limited the variety of suppliers and increased costs for key consumables. Access to logistics routes can be blocked or disrupted.

For more information, see the section titled "War Risk", as well as the Principal Risks section of the 2024 Annual Report and Accounts pages 84 to 94.

The Group is currently subject to legal proceedings in Ukraine, many of which relate to circumstances concerning Mr Zhevago and attempts by state agencies to recover funds from a collapsed bank he was associated with. These legal proceedings are ongoing in Ukrainian courts. The highest risk cases include: litigation with the Deposit Guarantee Fund in relation to corporate rights of three mining entities; a case brought by the Ministry of Justice to enforce and auction corporate rights in three mining entities; a claim on FPM to recover UAH4.7 billion (US$113 million) for contested sureties; litigation regarding share freezes in all Ukrainian subsidiaries related to the investigation in connection with Bank F&C and litigations on VAT refunds. Some other cases include claims related to royalties, ecology, waste products, transfer pricing disputes.

In February 2025, the State Bureau of Investigation in Ukraine ("SBI") announced that a Ukrainian court granted a request of the Prosecutor General's Office of Ukraine to transfer 49.5% of the corporate rights of Ferrexpo Poltava Mining to Ukraine's Asset Recovery and Management Agency ("ARMA"). No Ferrexpo Group company has received any official documentation or requests from the Ukrainian authorities with regards to the decision of the Pecherskyi District Court of Kyiv and management have not seen a copy of the court decision. The SBI statement followed a separate press release made by the SBI which said it was preparing to lodge a claim together with Ukraine's Ministry of Justice to the High Anti-Corruption Court of Ukraine, requesting the nationalisation of certain assets and corporate rights of FPM. It is the Group's understanding that no claim has been lodged. The details of these actions are therefore unclear at this stage and the Company is working with its legal advisors to further understand the situation.

In March 2025, Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining received notifications from the Ukrainian tax authorities of a decision to suspend the refund of VAT for the month of January 2025. Notifications of the withholding of further refunds up until and including April have also been received.

The actions and conduct of the Ukraine authorities in relation to these cases constitute breaches of Ukraine's obligations under the UK-Ukraine BIT and the Swiss-Ukraine BIT, including to accord Ferrexpo's investment fair and equitable treatment and not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment or disposal of Ferrexpo's investment. In these circumstances, Ferrexpo Plc and Ferrexpo AG have been left with no option but to send to the Government of Ukraine a formal written notification of potential claims under the UK-Ukraine BIT and the Swiss-Ukraine BIT. The purpose of this notification, sent in March 2025, was to explain how Ukraine's actions constitute breaches of Ukraine's obligations under the UK-Ukraine BIT and the Swiss-Ukraine BIT, to request that Ukraine procure the lifting and/or cessation of the unlawful actions, and to request the Government of Ukraine to enter into negotiations.

In May 2025, Ferrexpo received information that the Commercial Court of Poltava Region accepted for consideration an application from 'LLC "Financial Company" "Maxi Capital Group"' to open bankruptcy proceedings of FPM. Whilst the court has accepted the Maxi Capital application, no hearing has yet been heard in the court. Based on advice from Ukrainian legal counsel, during the upcoming preparatory hearing the court should consider that there is currently a dispute between Maxi Capital and FPM for contested sureties, no final decision in relation to such dispute has been made by the Supreme Court and as detailed below the Supreme Court has suspended the possible enforcement of such claim.

Major shareholder risk (new)

The Company's largest shareholder is Fevamotinico S.a.r.l., which as at the date of this report holds 49.3% of the voting rights in Ferrexpo plc. Fevamotinico S.a.r.l. is indirectly wholly owned by The Minco Trust. The Minco Trust is a discretionary trust that has three beneficiaries, consisting of Kostiantyn Zhevago and two other members of his family. Many of the ongoing legal proceedings involving Ferrexpo in the Ukrainian courts relate to Mr Zhevago. For example, the Deposit Guarantee Fund proceedings in connection with an alleged embezzlement of funds from Bank F&C, a Ukrainian bank previously owned by Mr Zhevago which was declared insolvent in 2015. Bank F&C has never been part of the Ferrexpo Group; however, the Deposit Guarantee Fund is seeking to recover the allegedly embezzled funds through Ferrexpo. Due to its association with Mr Zhevago, the Group may also experience negative media attention, operating challenges and strained relationships with its stakeholder groups. Consequently, the Risk Committee of the Group deemed it appropriate to introduce this new principal risk to the register.

Liquidity risk (new)

The Group's cash flow generation is affected by the volatility of iron ore prices on global markets and input costs including electricity, gas, diesel, grinding bodies, capital expenditures, some of which is outside of management's control.

Historically, the Group has managed to control its liquidity throughout various commodity cycles. Since the start of the war in Ukraine, however, the challenges for the Group have increased, factors that are beyond the control of management.

The Group is virtually debt free following the repayment of its large credit facility in June 2021. However, due to the situation in Ukraine and certain circumstances relating to Mr Zhevago, one of the Group's shareholders, the debt capital market is currently closed to the Group, making it critical that the Group has sufficient cash resources to ensure that its liabilities can be settled as they fall due.

Following the personal sanctions imposed on Mr Zhevago in February 2025 by the Ukrainian government, the Ukrainian tax authorities have formally suspended VAT refunds for January to April 2025, resulting in additional challenges to the Group. As a result of the suspended VAT refunds, the Group downscaled its operations resulting in an adjustment of the production plan to mitigate working capital outflows from the missing VAT refunds and to preserve cash.

In the second quarter of 2025, the Group reviewed and reduced its operating and capital expenditure as far as possible to maintain an appropriate cash balance. The cash balances assumed in the Group's long-term model for the next 12 to 18 months are also relevant to the Group's going concern assessment, which is subject to material uncertainties as certain matters are outside the Group's control, including potential cash outflows from ongoing legal cases in Ukraine.

See also Note 2 Summary of material accounting policies and Note 19 Commitments, contingencies and legal disputes to these condensed interim consolidated financial statements for further information.

Taxation (new)

The Group pays corporate profit tax in a number of jurisdictions, including Ukraine, Switzerland, the United Kingdom and the U.A.E. (Dubai), and its effective tax rate is subject to various factors outside of the Group's control. This includes the volatility in the global iron ore market and foreign exchange rates, primarily between the Ukrainian hryvnia and the US dollar.

The Group operates across a number of jurisdictions through its value chain and prices its sales between its subsidiaries using international benchmark prices for comparable products covering product quality and applicable freight costs.

Following the completion of two transfer pricing audits in Ukraine, the Group's two major subsidiaries received claims of UAH2,162 million (US$52 million as at 30 June 2025), including fines and penalties, and UAH259 million (US$6 million as at 30 June 2025), without potential fines and penalties, respectively. Despite the two significant claims received, the Group is still of the opinion that the terms of the cross-border transactions between the subsidiaries of the Group comply with the legislation applicable in the jurisdictions in which it operates.

In addition to the above-mentioned transfer pricing claims, a subsidiary of the Group in Ukraine received a claim in the amount of UAH1,233 million (US$30 million as at 30 June 2025) in relation to allegedly underpaid royalties.

The claims received are currently being heard by the courts in Ukraine and no decision has been made by a court instance that would make the claims a legal obligation. The Group will continue to defend its methodology applied to determine the prices between its subsidiaries and to compute royalties paid in the Ukrainian courts, but there is a risk that the independence of the judicial system and its immunity from economic and political influences in Ukraine is not upheld.

Any potential cash outflows in relation to these claims received would have a significant effect on the Group's available cash balance and its ability to continue as a going concern. See also Note 2 Summary of material accounting policies and Note 19 Commitments, contingencies and legal disputes to these condensed interim consolidated financial statements for further information.

Directors' responsibility statement

The Interim Report complies with the Disclosure Guidance and Transparency Rules ("DTR") of the United Kingdom's Financial Conduct Authority in respect of the requirement to produce a half-yearly financial report. The preparation of the Interim Report for the six months ended 30 June 2025 in accordance with applicable laws, regulations and accounting standards is the responsibility of, and has been approved by, the Directors.

We confirm that to the best of our knowledge:

· the condensed set of consolidated financial statements has been prepared in accordance with IAS 34 as contained in UK adopted IFRS;

· the Interim Management Report includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the condensed financial statements, and description of the principal risks and uncertainties for the remaining six months of the financial year, as required by DTR4.2.7R; and

· the Interim Management Report includes a fair review of disclosures of material related party transactions that have occurred in the first six months of the financial year and of material changes in the related party transactions described in the 2024 Annual Report and Accounts, as required by DTR4.2.8R.

The Directors are also responsible for the maintenance and integrity of the Ferrexpo plc website. A list of current Directors is maintained on the Ferrexpo plc website, which can be found at www.ferrexpo.com. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

For and on behalf of the Board

Independent Review Report to Ferrexpo plc

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six-months ended 30 June 2025 which comprises the Interim Consolidated Income Statement, the Interim Consolidated Statement of Comprehensive Income, the Interim Consolidated Statement of Financial Position, the Interim Consolidated Statement of Cash Flows, the Interim Consolidated Statement of Changes in Equity and the related explanatory Notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 is not prepared, in all material respects, in accordance with International Accounting Standard ('IAS') 34 "Interim Financial Reporting", as adopted for use in the United Kingdom and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards adopted for use in the United Kingdom ("UK adopted IFRS"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard ('IAS') 34 "Interim Financial Reporting", as adopted for use in the United Kingdom.

Material Uncertainty Relating to Going Concern

We draw your attention to Note 2, which indicates that the ongoing war in Ukraine poses a threat to the Group's mining, processing and logistics operations within Ukraine and may cast significant doubt on the ability of the Group to continue as a going concern. As stated in Note 2, management has assessed that the duration and severity of the impact of the war in Ukraine on the Group's activities are difficult to predict and indicate that a material uncertainty exists as some of the uncertainties identified are outside of the Group management's control.

In addition, a further material uncertainty exists, as disclosed in Note 2, relating to a number of legal disputes in Ukraine due to the application of local legislation and the outcomes of proceedings involving the Group. In particular, the decision by the Ukraine Court of Appeal to uphold the award in favour of the claimant in the contested sureties claim, and the potential enforcement of this decision, may place significant demands on the Group's future cash resources.

Additionally, as disclosed in Note 2, on 12 February 2025, personal sanctions were imposed by the Ukrainian authorities on Mr Kostyantin Zhevago, one of three owners of The Minco Trust, which fully owns Fevamotinico, the largest shareholder of the Group. Although no sanctions have been imposed directly on any Group entities, these personal sanctions have indirect consequences for the Group, such as heightened challenges in relation to tax matters, including the refusal to issue VAT refunds, and the potential nationalisation of 49.5% of the shares of FPM and certain of its assets which may further impact the Group's ability to continue as a going concern.

Our opinion is not modified in respect of these matters.

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE 2410, however future events or conditions may cause the entity to cease to continue as a going concern.

Emphasis of Matters

We draw your attention to Note 19 relating to Commitments, contingencies and legal disputes which describes the uncertainty in the application of local legislation in Ukraine in respect of the outcome of the proceedings in which the Group is involved.

We also draw your attention to Note 10 relating to Property, plant and equipment and Note 19 relating to Commitments, contingencies and legal disputes, which describes the uncertainty related to the estimate of the recoverable amount of the Group's Cash Generating Unit as a result of the ongoing war and ongoing legal proceedings in Ukraine.

Our conclusion is not modified in respect of either of these two matters.

Responsibilities of Directors

The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the Directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor Responsibilities for the review of the financial information

In reviewing the half-yearly financial report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our conclusion relating to the material uncertainties relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our Report

This report is made solely to the Company in accordance with guidance contained in ISRE (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purposes. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

MHA, Auditor

London, United Kingdom

5 August 2025

MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542)

Interim Consolidated Income Statement

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Interim Consolidated Statement of Comprehensive Income

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Interim Consolidated Statement of Financial Position

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 5 August 2025 and signed on behalf of the Board.

Lucio Genovese Nikolay Kladiev

Executive Chair Chief Financial Officer and Executive Director

Interim Consolidated Statement of Cash Flows

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Interim Consolidated Statement of Changes in Equity

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Although accounts are published in US dollars and dividends are declared in US dollars, the shares are denominated in UK pounds sterling and dividends are therefore paid in UK pounds sterling. See Note 9 Earnings per share and dividends paid and proposed for dividends paid for further information.

Notes to the Interim Condensed consolidated financial statements

Note 1: Corporate information

Organisation and operation

Ferrexpo plc (the "Company") is incorporated and registered in England and Wales, of which England is considered to be the country of domicile, with its registered office at 55 St James's Street, London SW1A 1LA, UK. The Company is listed on the London Stock Exchange and it is a member of the FTSE All-share ranking. Ferrexpo plc and its subsidiaries (the "Group") operate two mines and a processing plant near Kremenchuk in Ukraine, have an interest in a port in Odessa and sales and marketing activities around the world, including offices in Switzerland, the U.A.E. (Dubai), Japan, China, Singapore and Ukraine. The Group also owns logistics assets in Austria, which operate a fleet of vessels operating on the Rhine and Danube waterways and an ocean-going vessel, which provides top-off services. The Group's operations are vertically integrated from iron ore mining through to iron ore concentrate and pellet production and subsequent logistics. The Group's mineral properties lie within the Kremenchuk Magnetic Anomaly and are currently being extracted at the Gorishne-Plavninske-Lavrykivske ("GPL") and Yerystivske deposits.

Despite the ongoing war in Ukraine, the Group has managed to continue its operations in the first half of the financial year 2025. The business environment in Ukraine remains difficult and challenging. This is not just because of the ongoing war, but also because of several ongoing legal disputes in the country. As disclosed in Note 35 Events after the reporting period included in the Group's 2024 Annual Report & Accounts, personal sanctions have been imposed on Kostyantin Zhevago ("Mr Zhevago") by the State of Ukraine.These sanctions, which have been treated as a non-adjusting post balance sheet event as at 31 December 2024, are personal in nature and have not been imposed on any member of the Ferrexpo Group. However, as a result of these sanctions against Mr Zhevago, the tax authorities in Ukraine refused to make VAT refunds to the Group's subsidiaries in Ukraine. As a consequence, the Group had to adjust its production plan to minimise the impact of the rejected VAT refunds on the Group's liquidity, which also affected the possible sales to the Group's international customers and its cash flow generation. The lower cash flow generation did not only have an impact on the Group's available liquidity, but also on the carrying value of the Group's non-current operating assets, resulting in an impairment loss of US$154,323 thousand as at 30 June 2025. As at the date of the approval of these interim condensed consolidated financial statements, the war is still ongoing and continues to pose a significant threat to the Group's mining, processing and logistics operations within Ukraine. In addition to the war-related material uncertainty, another material uncertainty is related to the several ongoing legal actions against the Group in Ukraine, including the suspension of VAT refunds, which may be exacerbated by the fact that the Group is operating in a dynamic and adverse political landscape in Ukraine.

See Note 2 Summary of material accounting policies, Note 10 Property, plant and equipment and Note 19 Commitments, contingencies and legal disputes for further information.

The largest shareholder of the Group is Fevamotinico S.a.r.l. ("Fevamotinico"), a company incorporated in Luxembourg. Fevamotinico is ultimately wholly owned by The Minco Trust, of which Kostyantin Zhevago ("Mr Zhevago") and two other members of his family are the beneficiaries. At the time this report was published, Fevamotinico held 49.3% (31 December 2024: 49.3%; 30 June 2024: 49.3%) of Ferrexpo plc's issued voting share capital (excluding treasury shares).

The Group's interests in its subsidiaries are held indirectly by the Company, with the exception of Ferrexpo AG, which is directly held. The Group's consolidated subsidiaries are disclosed in the Additional Disclosures of the 2024 Annual Report & Accounts.

At 30 June 2025, the Group also holds through PJSC Ferrexpo Poltava Mining an interest of 49.9% (31 December 2024: 49.9%; 30 June 2024: 49.9%) in TIS Ruda LLC, a Ukrainian port located on the Black Sea, which is accounted for as an associate, using the equity method of accounting.

Note 2: Summary of material accounting policies

Basis of preparation

The interim condensed consolidated financial statements for the six-month period ended 30 June 2025 have been prepared in accordance with International Accounting Standard ('IAS') 34 Interim Financial Reporting, as adopted for use in the United Kingdom. The interim condensed consolidated financial statements do not include all of the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2024.

The interim condensed consolidated financial statements do not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the full year is based on the statutory accounts for the financial year ended 31 December 2024. A copy of the statutory accounts for that year, which were prepared in accordance with International Financial Reporting Standards adopted for use in the United Kingdom ("UK adopted IFRS") and with the Companies Act 2006, as applicable to companies reporting under international accounting standards, has been delivered to the Registrar of Companies. The auditor's report under section 495 of the Companies Act 2006 in relation to those accounts (i) was unqualified, (ii) did not contain a statement under section S498(2) or S498(3) of the Companies Act 2006, but (iii) included a separate section with regard to material uncertainties related to going concern as a result of the ongoing war and the application of local legislation in Ukraine in respect of the outcome of the proceedings in which the Group is involved. The audit report also drew attention to the uncertainty in the application of local legislation in Ukraine in respect of the outcome of the proceedings in which the Group is involved and to the uncertainty related to the estimate of the recoverable amount of certain assets of the Group as result of the ongoing war and ongoing legal proceedings in Ukraine.

These interim condensed consolidated financial statements have been reviewed, not audited.

Going concern

Despite the unpredictable situation in Ukraine due to the ongoing war and legal actions against the Group, the Group showed strong momentum at the beginning of the year, resulting in the Group's best quarterly production in the first quarter since the full-scale invasion in February 2022. This strong momentum was significantly curtailed in the second quarter as the Group started to experience the full impact of the Ukrainian tax authorities' decisions to suspend the refund of VAT to the Group's subsidiaries in Ukraine.

As at the date of the approval of these interim condensed consolidated financial statements, both the war and the legal actions against the Group in Ukraine are still ongoing, which have affected the Group's business activities and thus its profitability and cash flow generation during the six-month period ended 30 June 2025 and are also expected to have an impact on the next 18 months since the approval of these interim condensed consolidated financial statements, which relate to the period covered by the Group's going concern assessment.

The challenging and unpredictable environment in which the Group has been operating since the beginning of the invasion and the ongoing war, whose duration and impact on the Group's activities in future periods are difficult to predict, continues to represent a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. In addition to the war-related material uncertainty, the Group is also exposed to the risks associated with operating in a dynamic and adverse political landscape in Ukraine, which may or may not be exacerbated by the war and/or the current circumstances facing Mr Zhevago. As a result, the Group is exposed to a number of risk areas that are heightened compared to those expected in a stable economy, such as an environment of political, fiscal and legal uncertainties, which represents another material uncertainty as at the date of the approval of these interim condensed consolidated financial statements.

Following the personal sanctions imposed on Mr Zhevago by Ukrainian authorities on 12 February 2025, the Group's subsidiaries in Ukraine have not been receiving VAT refunds since March 2025. As a result of the suspension of VAT refunds in Ukraine, the Group adjusted its production plan to mitigate working capital outflows and preserve cash, affecting also the Group's cash flow generation during the period covered by the Group's going concern assessment. The financial long-term model was updated in June 2025 using management's best estimate of reasonably conservative key assumptions, taking also into account the current circumstances the Group has to operate in, including the effects from the suspension of VAT refunds in Ukraine. The level of the Group's production is currently restricted due to outstanding VAT refunds and also remains dependent on a constant power supply and the logistics network available to the Group as well as other potential adverse effects on the Group's operation due to the ongoing war.

As a result of the challenging situation during the six-month period ended 30 June 2025, the Group's total commercial production totalled 3,393 thousand tonnes of iron ore pellets and concentrate, a decrease of 9% compared to 3,727 thousand tonnes during the six-month period ended 30 June 2024. As a result of the outstanding VAT refunds since March 2025, the Group significantly reduced its capital expenditure programme, which however could only partially offset the significantly lower operating cash flow generation. As a result, the closing balance of cash and cash equivalents decreased to US$52,262 thousand as at 30 June 2025, compared to US$105,919 thousand as of 31 December 2024.

As at the date of the approval of these interim condensed consolidated financial statements, the Group is in a net cash position of approximately US$66,330 thousand with an available cash balance of approximately US$68,639 thousand. In addition to the available cash balance, the Group has an outstanding trade receivable balance of approximately US$9,714 thousand from its pellet and concentrate sales, which is expected to be collected in the next few months, and finished goods already stockpiled of 201 thousand tonnes at different ports or storage locations other than the plant.

As disclosed in Note 30 Commitments, contingencies and legal disputes included in the Group's 2024 Annual Report & Accounts, the ongoing war in Ukraine and other circumstances facing the Group have led to an escalation of a number of risks, including risks relating to the political environment and the independence of the legal system in Ukraine, which remain at the date of the approval of these interim condensed consolidated financial statements and could have a material negative impact on the Group's business activities and reputation.

The court proceedings before the Supreme Court of Ukraine in respect of contested sureties (see Note 19 Commitments, contingencies and legal disputes for further details) continued throughout the first half of the financial year 2025. Although management is of the opinion that this claim is without merit, the full provision in the amount of UAH4,727 million (US$113,518 thousand as at 30 June 2025), which was recorded as at the end of 2023, was not released, considering the magnitude of this specific claim and the risks associated with the judicial system in Ukraine. The outcome of this ongoing legal dispute continues to represent a material uncertainty in terms of the Group's ability to continue as a going concern. A future cash outflow, which also depends on the details and technicalities of a possible enforcement in the event of a negative decision by the Supreme Court, is likely to have a significant impact on the Group's future cash flow generation and available liquidity.

In addition to this claim and as announced on 4 February 2025, the Group's subsidiary Ferrexpo Poltava Mining ("FPM") has received a civil claim seeking joint liability of FPM and its General Director for damages amounting to UAH157 billion (approximately US$3.8 billion as at 30 June 2025) in favour of the Ukrainian state (see Note 19 Commitments, contingencies and legal disputes for further details). This claim is related to an initial accusation of the illegal sale of waste products, which have transformed into accusations that FPM is illegally mining and selling subsoil (minerals other than iron ore), which is said to have caused damage to the environment. FPM rejects these allegations in their entirety on the basis that there was no illegal extraction of the subsoil. FPM mines and extracts iron ore according to its mining licence and provides for the removal of rock and its storage as a waste in addition to the extraction of iron ore. The management is of the opinion that these accusations and the claim are without merit and FPM has started the vigorous defence of its position in the Ukrainian courts.

As mentioned above, the Ukrainian subsidiaries of the Group have not been receiving VAT refunds since March 2025. Although, the sanctions imposed on Mr Zhevago have not been imposed on any member of the Group, the personal sanctions on Mr Zhevago have implications for the Group's operation and, as a consequence, on its profitability and cash flow generation, which could have an impact on the Group's ability to continue as a going concern. The absence of the VAT refunds and the impact on cash flow generation was, together with possible mitigating actions, reflected in the Group's long-term model used for the going concern assessment. In connection with the personal sanctions on Mr Zhevago, on 20 February 2025, the State Bureau of Investigation (the "SBI") made a media announcement regarding a potential claim to the High Anti-Corruption Court of Ukraine (the "HACC") to nationalise 49.5% of shares in FPM and certain of its assets. As at the date of approval of these interim condensed consolidated financial statements, FPM has not received a formal notification of such a claim. Further to that, under Ukrainian laws, the SBI has no authority to petition, bring claims or make proposals (both on nationalisation or application of any asset-confiscation sanction) to the HACC and the proper authority should be the Ministry of Justice of Ukraine. Nonetheless, in the event of a nationalisation of 49.5% of shares in FPM and certain of its assets, it is likely this would have a significant impact on the Group's ability to continue as a going concern as FPM could lose key assets required for the production of iron ore pellets and concentrate. In addition, a nationalisation of 49.5% of shares in FPM would have an impact on the equity attributable to the shareholders of Ferrexpo plc and its future distributable reserves because Ferrexpo AG ("FAG") would not be entitled to dividends in relation to the nationalised 49.5% of shares in FPM. See Note 9 Earnings per share and dividends paid and proposed for further details.

On 4 March 2025, the SBI also made a media statement that the Pecherskyi District Court of Kyiv has granted a request of the Prosecutor General's Office of Ukraine to transfer 49.5% of the corporate rights in FPM held by FAG to Ukraine's Asset Recovery and Management Agency ("ARMA"). This transfer is in connection with ongoing proceedings against Mr Zhevago relating to Bank F&C, as disclosed in detail on pages 45 and 46 of Note 19 Commitments, contingencies and legal disputes. Under the Ukrainian Criminal Procedure Code, the ARMA can accept into its management a piece of property that has been arrested only to preserve real evidence. Corporate rights in a Ukrainian company do not constitute real evidence as they are not treated as material objects. Therefore, based on independent legal advice from Ukrainian counsel, management understands the transfer of these corporate rights into the ARMA's management is illegal. As at the date of the approval of these interim condensed consolidated financial statements, the Group has not been provided with a copy of the relevant court decision of the Pecherskyi District Court of Kyiv and therefore the precise details of the court decision are not known to the Group. However, based on independent legal advice from Ukrainian counsel, management understands that FAG remains the 100% owner of FPM and management does not expect that the transfer of 49.5% of the corporate rights in FPM to ARMA will affect FPM's operations or the Group's ability to continue as a going concern. Asset management is carried out on the basis of a management agreement concluded between ARMA and a selected manager. Based on article 21 of the Law on ARMA, where the asset concerned is shares, the manager is obliged to coordinate with the owner of owner of those shares regarding the exercise of their management powers in respect of voting at any shareholders meeting with the owner of the shares. This rule means that any manager appointed by ARMA would not be able to vote at any shareholders meeting on its own, but only with the consent of the owner, Ferrexpo AG. However, a transfer of 49.5% of the corporate rights in FPM to ARMA for management of these corporate rights would have an impact on the equity attributable to the shareholders of Ferrexpo plc and its future distributable reserves. See Note 9 Earnings per share and dividends paid and proposed for further details.

As part of management's going concern assessment, the Group continuously adjusts its financial long-term model to reflect the latest developments in terms of possible production and sales volumes as well as latest market prices and production costs, which are still adversely affected by production volumes lower than those before the war commenced. The Group's long-term model does also consider the effects from the suspension of VAT refunds in Ukraine, caused by personal sanctions imposed on Mr Zhevago on 12 February 2025, which required the downscaling of the Group's operation to minimise the impact on the Group's liquidity.

The updated base case of the financial long-term model shows that the Group has reasonably sufficient liquidity to continue its operations at a reduced level throughout the entire period of the management's going concern assessment, covering a period of 18 months from the date of approval of these interim condensed consolidated financial statements. However, the Group's available cash balance for the period 18 months after the approval of these interim condensed consolidated financial statements also depends on the time at which the VAT refund is resumed. The updated base case assumes a pellet production volume of approximately 55% and 47% of the pre-war level for the financial years 2025 and 2026, respectively, and an expected recovery to almost the pre-war levels in 2028.

The update of the long-term model resulted in a delay of the expected ramp-up of production to pre-war level by another one year. The reduction of the production plan affects the Group's possible sales and therefore results in a significantly lower cash flow generation, affecting also the available cash balances throughout the period of the going concern assessment. In addition, the production and sales volumes are also dependent on a constant power supply, the logistics network available to the Group and other potential negative effects on the Group's business activities as a result of the ongoing war.

The Group's cash flow generation is most sensitive to price changes. The sensitivities prepared for reasonably possible adverse changes, with a focus on the expected realised prices, show negative available liquidity balances under some scenarios in the first quarter of 2026, before any mitigating actions are taken, such as a further reduction of operating expenditures and the Group's mining activities. With the significant reduction of the Group's operation in the updated long-term model, the available mitigating actions also reduced significantly. The mitigating actions under the control of management are estimated to be approximately US$18,000 thousand until 31 December 2026 and are considered to be sufficient to offset negative effects from reasonably possible adverse changes to the base case. There are further potential mitigating actions, which are however not fully under the control of management, which are being further explored. A prolonged absence of VAT refunds would have an adverse effect on the cash balances assumed in the current long-term model, for which the Group's management identified risk mitigating actions to partially offset this impact. Considering the tight available cash balances under the base case scenario and sensitivity to realised prices, the available cash balance is expected to be depleted by late 2025, when combining all effects from reasonable adverse changes (stress test). However, it is management's position that, as in the past, a combination of all reasonably possible or plausible adverse changes in respect of realised prices and production costs is unlikely to happen in combination as a result of the historical natural hedge between iron ore prices and prices for key input materials.

The claims and certain decisions received by the courts in Ukraine are another example of the risk of operating in a dynamic and adverse political landscape in Ukraine, which creates additional challenges for both the Group's subsidiaries in Ukraine and, also for the Group itself.

The Group has assessed that, taking into account:

· its available cash and cash equivalents;

· its cash flow projections, adjusted for the effects caused by the ongoing war in Ukraine and potential absence of VAT refunds, for the period of management's going concern assessment covering a period of 18 months from the date of the approval of these interim condensed consolidated financial statements;

· the feasibility and effectiveness of all available mitigating actions within management's control for identified uncertainties;

· the legal merits in terms of the ongoing legal dispute regarding the above mentioned contested sureties and potential future actions available to protect the interests of the Group in case of a negative decision from the Supreme Court;

· the suspension of VAT refunds, which might not resume as expected by management; and

· the risk of nationalisation 49.5% of shares in FPM and certain of its assets, which are outside of management's control, the uncertainty in relation to the independence of the judicial system and its immunity from economic and political influences in Ukraine, which could have an impact on the outcome of the ongoing legal disputes,

there remains a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

In respect of the contested sureties claim mentioned above, no decision has been made by the Supreme Court as at the date of the approval of these interim condensed consolidated financial statements. The next hearing before the Supreme Court is scheduled for 8 September 2025. If the Supreme Court rules in favour of the claimants in this case, the commencement of enforcement procedures could potentially have a material negative impact on the Group's business activities and its ability to continue as a going concern. In connection with the contested sureties claim, the counter party filed an application for bankruptcy of FPM and a hearing scheduled for 24 July 2025 was postponed. A further hearing is yet to be scheduled. In the event of a negative decision by the court of first instance, the Group will appeal. In the meantime, it is not possible to assess the potential impact of such bankruptcy proceedings and their timing, as these depend on further court proceedings, which may extend over a considerable period of time. In terms of the claim received regarding alleged illegal mining and selling of subsoil (minerals other than iron ore), the date of the next hearing is currently not known, and it can be assumed that this will be a lengthy process. However, considering the magnitude of the subsoil claim, a final decision by the Supreme Court, after potential negative decisions in the lower courts in Ukraine, could have a negative impact on the Group's ability to continue as a going concern. See Note 19 Commitments, contingencies and legal disputes for further information, which should be read in conjunction with this note. As disclosed in Note 8 Taxation, the Group's two major subsidiaries in Ukraine received tax audit reports in September and November 2023, stating potential claims for underpayment of corporate profit taxes in Ukraine of UAH2,162 million (US$51,920 thousand as at 30 June 2025) and UAH259 million (US$6,220 thousand as at 30 June 2025), respectively. Negative decisions by the court of appeal, after potential negative decisions of the court of first instance, is likely to have a significant impact on the Group's future cash flow generation and available liquidity and, as a consequence, on the Group's ability to continue as a going concern See Note 8 Taxation for further information.

As at the date of the approval of these interim condensed consolidated financial statements, the Group's operations, located adjacent to the city of Horishni Plavni, have not been directly affected by the ongoing war, but this remains a risk. Should the area surrounding the Group's operations become subject to the armed conflict, there would be a significant risk posed to the safety of the Group's workforce and the local community, as well as a significant risk to key assets and the infrastructure required for the Group to operate effectively. See the Update on Principal Risks section on pages 21 and 22 for further information on the Ukraine country risk.

Considering the current situation of the ongoing war and the Group's legal disputes in Ukraine, the Group continues to prepare its interim condensed consolidated financial statements on a going concern basis. This conclusion is based on the Group's ability to swiftly adapt to changing circumstances caused by the war, the effects from the suspension of VAT refunds in Ukraine and the independent legal advice received regarding the merits of the ongoing legal actions against the Group in Ukraine. However, as explained above, many of the identified uncertainties in respect of the ongoing war and legal disputes are outside of management's control, and are unpredictable, which may cast significant doubt upon the Group's ability to continue as a going concern. For more information on critical judgements made by management in preparing these interim condensed consolidated financial statements, see also Note 19 Commitments, contingencies and legal disputes in respect of other ongoing legal proceedings and disputes.

If the Group is unable to continue to realise assets and discharge liabilities in the normal course of business, it would be necessary to adjust the amounts in the statement of financial position in the future to reflect these circumstances, which may materially change the measurement and classification of certain figures contained in these interim condensed consolidated financial statements.

Accounting policies adopted

The accounting policies and methods of computation adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2024, except for the adoption of the new standards, interpretations and amendments to IFRS listed below that became effective as of 1 January 2025, although without an impact on the Group's interim condensed consolidated financial statements as at 30 June 2025.

· Amendments to IAS 21 Lack of Exchangeability provide guidance on when a currency is exchangeable into another currency, and further clarify how a spot rate is estimated when a currency lacks exchangeability.

Use of critical estimates and judgements

In the course of preparing financial statements, management has to make estimates and judgements that can have a significant impact on the Group's interim condensed consolidated financial statements.

The most critical accounting estimates include

· those required in terms of the computation of the value in use of the Group's non-current assets as a result of the ongoing war and legal actions against the Group in Ukraine, including the suspension of VAT refunds since March 2025 (Note 10 Property, plant and equipment, and Note 12 Intangible assets);

Critical judgements predominantly relate to

· the basis of preparation of these interim condensed consolidated financial statements in respect of the going concern assumption (see above) as a result of the ongoing war and operating in a developing economy, which may or may not be exacerbated by the war and/or the current circumstances facing the Group's controlling shareholder;

· the application of tax legislation in the jurisdictions the Group operates (Note 8 Taxation);

· the recoverability of outstanding VAT in Ukraine (Note 13: Other taxes recoverable and prepaid); and

· the assessment of ongoing legal proceedings and claims in an environment of political, fiscal and legal uncertainties (Note 19 Commitments, contingencies and legal disputes).

The use of inaccurate assumptions in assessments made for any of these estimates and judgements could result in a significant impact on the Group's financial position and financial performance. With the exception of the situation regarding VAT in Ukraine, there are no significant changes to the afore-mentioned critical estimates and judgements compared to 31 December 2024. Detailed descriptions of the critical estimates and judgements are disclosed in the respective disclosure notes stated above.

Seasonality

The Group's operations are not affected by seasonality.

Note 3: Segment information

The Group is managed as a single segment, which produces, develops and markets its principal product, iron ore pellets, for sale to the metallurgical industry. While the revenue generated by the Group is monitored at a more detailed level, there are no separate measures of profit reported to the Group's Chief Operating Decision-Maker ("CODM"). In accordance with IFRS 8 Operating Segments, the Group presents its results in a single segment, which are disclosed in the interim consolidated income statement for the Group. Management monitors the operating result of the Group based on a number of measures including Underlying EBITDA, gross profit and net cash.

Underlying EBITDA and gross profit

The Group presents the Underlying EBITDA as it is a useful measure for evaluating its ability to generate cash and its operating performance. The Group amended its definition of Underlying EBITDA during the financial year 2024 by excluding operating foreign exchange gains and losses. The full definition of Underlying EBITDA and details in respect of the amended definition are provided in the Alternative Performance Measures ("APMs") section.

Net cash

Net cash as defined by the Group comprises cash and cash equivalents less interest-bearing loans and borrowings.

With the exception of lease liabilities, the Group does not have any outstanding interest-bearing loans and borrowings as at 30 June 2025 and the end of the comparative periods ended 31 December 2024 and 30 June 2024.

Net cash is considered to be an APM and further information on the APMs used by the Group, including the definitions, is provided in the APM section.

Note 4: Revenue

Revenue for the six-month period ended 30 June 2025 consisted of the following:

Information on the commodity risk related to provisionally priced sales are provided in Note 18 Financial instruments.

Total revenue from sales of iron ore pellets and concentrate by geographical destination were as follows:

The Group markets its products across various regions. The disclosure of the segmentation reflects how the Group makes its business decisions and monitors its sales. Information about the composition of the regions is provided in the Glossary. The Group's sales of iron ore pellets and concentrate were still significantly below pre-war levels because of the ongoing war in Ukraine as it was also the case for the comparative periods ended 30 June 2024 and 31 December 2024. The Group's seaborne sales continued to benefit from the availability of the Ukrainian Black Sea ports, which had been closed since the beginning of the war, but were reopened again during the financial year 2024. The Group's sales for the six-month period ended 30 June 2025 were also affected by the suspension of VAT refunds in Ukraine, which required the downscaling of the Group's operation in Ukraine to minimise the impact on the Group's liquidity. See Note 13: Other taxes recoverable and prepaid for further details.

Note 5: Operating expenses

Operating expenses for the six-month period ended 30 June 2025 consisted of the following:

Total operating expenses include:

Note 6: Foreign exchange gains and losses

Foreign exchange gains and losses for the six-month period ended 30 June 2025 consisted of the following:

Operating foreign exchange gains and losses are those items that are directly related to the production and sale of pellets (e.g. trade receivables, trade payables on operating expenditure) whereas non-operating gains and losses are those associated with the Group's financing and treasury activities and with local income tax payables.

The translation differences and foreign exchange gains and losses are predominantly dependent on the fluctuation of the exchange rate of the Ukrainian hryvnia against the US dollar and the outstanding US dollar denominated receivable balances in Ukraine. A devaluation of the local currency has generally a positive effect on the Group's production costs and results in operating foreign exchange gains on the conversion of the Ukrainian subsidiaries' trade receivables denominated in US dollar. The effect arising on the translation of non-US dollar functional currency operations, mainly in Ukrainian hryvnia, are included in the translation reserve. See Note 20 Share capital and reserves for further details.

The Ukrainian hryvnia appreciated marginally from 42.039 to 41.641 compared to the US dollar during the six month period ended 30 June 2025. A devaluation of the local currency can result in significant foreign exchange gains on US dollar denominated receivable balances, depending on the underlying net balances, and a reduction of the Group's net assets as a significant portion of assets and liabilities of the Ukrainian subsidiaries are denominated in the local currency, with an opposite effect in case of an appreciation of the local currency in Ukraine.

The table below shows the closing and average rate of the most relevant currencies of the Group compared to the US dollar.

Note 7: Net finance expense

Finance expense and income for the period ended 30 June 2025 consisted of the following:

With the exception of lease liabilities, the Group does not have any outstanding interest-bearing loans and borrowings and no borrowing costs are therefore capitalised. See Note 17 Lease liabilities for further information.

Note 8: Taxation

The Group pays corporate profit tax in a number of jurisdictions, Ukraine, Switzerland, the United Kingdom and the U.A.E. (Dubai), and its effective tax rate is subject to various factors outside of the Group's control. This includes the volatility in the global iron pellet market and foreign exchange rates, primarily between the Ukrainian hryvnia and the US dollar.

The expected weighted average statutory income tax rate for the financial year 2025 is 19.9% (30 June 2024: 23.7%; 31 December 2024: 15% before the effect from the impairment loss of US$71,635 thousand) before any special items included in the profit before tax for the period and income tax expense. The expected tax rate for a financial year is computed based on the expected taxable profits in the Group's major jurisdictions taken from the latest forecast multiplied with the enacted statutory tax rates in these jurisdictions.

The effective tax rate as of 30 June 2025 is affected by the additional impairment loss of US$154,323 thousand on the Group's non-current operating assets, which is primarily to be allocated to the Group's operations in Ukraine, and the effect from extracted low grade ore totaling US$11,838 thousand, which are both not tax deductible in Ukraine. As a consequence, there is no deferred tax effect recognised in respect of the impairment loss recorded as it was done in the past on previously recorded impairment losses. The Group is also in a loss position before the significant impairment loss recorded as at 30 June 2025, and no deferred tax assets have been recognised on the resulting tax losses carried forwards as it is currently uncertain whether the Group's subsidiaries in the various jurisdictions will be able to benefit from them in the near future. Because of these effects, the effective tax rate for the first half of the financial year 2025 was positive at 4.9% and therefore not comparable to the comparative periods. The effective tax rate for the comparative period ended 30 June 2024 was 26.7% whereas the rate was 33.7% for the financial year 2024, after the elimination of exceptional items resulting in a loss before tax. Without the special effects mentioned above, the effective tax rate would have been 29.4%, still positive due to the overall loss position of the Group as at 30 June 2025 (30 June 2024: 23.9%; 31 December 2024: 145.0%).

The income tax expense for the period ended 30 June 2025 consisted of the following:

The net income tax payable as at 30 June 2025 consisted of the following:

Critical judgements

The Group operates across a number of jurisdictions through its value chain and prices its sales between its subsidiaries using international benchmark prices for comparable products covering product quality and applicable freight costs. Despite two claims received in Ukraine in 2023, the Group is still of the opinion that the terms of the cross-border transactions between the subsidiaries of the Group comply with the legislation applicable in the jurisdictions in which it operates.

In connection with two audits initiated by the State Tax Service of Ukraine ("STS") , formerly known as State Fiscal Service of Ukraine ("SFS"), on 18 February and on 14 June 2021 the Group's two major subsidiaries in Ukraine received tax audit reports on 13 September 2023 and 8 November 2023, stating potential claims for underpayment of corporate profit taxes in Ukraine of UAH2,162 million (US$51,920 thousand as at 30 June 2025), including fines and penalties, and UAH259 million (US$6,220 thousand as at 30 June 2025), without potential fines and penalties, respectively.

The two claims received are in relation to cross-border transactions for iron ore products between the two Ukrainian subsidiaries of the Group and two subsidiaries of the Group outside of Ukraine during the financial years 2015 to 2017. Based on previous experience, no agreements could be reached with the tax authorities and the claims are to be heard by the courts in Ukraine. As a result, both subsidiaries filed the objections against the potential claims stated in the tax audit reports received. After various preparatory meetings in 2024 for both cases, the first hearings on the merits before the court of first instance took place in November 2024, followed by several hearings later in 2024 and in 2025. These hearings are still ongoing and, as a result, the court of first instance has not yet made any final decisions as at the date of the approval of these interim condensed consolidated financial statements.

A partially negative verdict of the Supreme Court was received by one of the Group's subsidiaries in respect of claims made by the STS as a result of a tax audit of cross-border transactions for the period from 1 September 2013 to 31 December 2015. It is the Group's position that the STS used the verdict of the Supreme Court on the claims for the period from 1 September 2013 to 31 December 2015 as a precedent for the claims made for cross-border transactions during the financial years 2015 to 2017, although the Supreme Court did not appropriately consider relevant technical grounds and the applicable legislation when ruling on this specific case.

In terms of the claims received, the Group will continue to defend its methodology applied to determine the prices between its subsidiaries in the Ukrainian courts, but there is a risk that the independence of the judicial system and its immunity from economic and political influences in Ukraine is not upheld. As at the date of the approval of these interim condensed consolidated financial statements, no final court decisions have been made for the above-mentioned claims received by the two Ukrainian subsidiaries of the Group and, as a consequence, no provisions have been recorded as at 30 June 2025, neither for the claims received nor for any subsequent years, which might also be material, as it is impossible to reasonably quantify the potential exposure. Negative decisions by the court of appeal, after potential negative decisions of the court of first instance, is likely to have a significant impact on the Group's future cash flow generation and available liquidity and, as a consequence, on the Group's ability to continue as a going concern. See Note 2 Summary of material accounting policies for further information.

Separate from the cases mentioned above, on 23 June 2020 Ferrexpo Poltava Mining ("FPM") received a court ruling, which grants access to information and documents to the State Bureau of Investigation in Ukraine ("SBI") in relation to the sale of iron ore products to two subsidiaries of the Group outside of Ukraine during the years 2013 to 2019. FPM cooperated with the SBI and provided the requested information as per the court ruling to support these investigations. On 20 October 2023, the SBI raided the FPM offices with the intention of collecting documents and information for ongoing transfer pricing investigations. In October 2024, FPM became aware of a new transfer pricing investigation by the SBI in connection with the financial years 2014 to 2017. There had been no actions or any new requests from the SBI as at the date of the approval of these interim condensed consolidated financial statements

In accordance with the provisions of IFRIC 23 Uncertainty over income tax treatments, the Group reviewed and reassessed its exposure in respect of all uncertain tax positions, including the claims received and for cross-border transactions in subsequent years. It is the position of management of the Group and the Group's external tax advisors that the Ukrainian legislation and regulations on taxation are not always clearly written and are therefore subject to varying interpretations and inconsistent enforcement by local, regional and national tax authorities.

Considering the uncertainties in terms of the legal and tax framework in Ukraine, the Group will continue to defend its pricing methodology applied during all the years in the courts in Ukraine. An unfavourable outcome of any future court proceedings would have an adverse impact on the Group's total income tax expense and effective tax rate in future periods. See also the Update on Principal Risks section for further information on the Ukraine country risk.

Except for the matters in Ukraine mentioned above, the Group is not aware of any other significant challenges by local tax authorities in any jurisdictions in which the Group operates. However, the application of international and local tax legislation and regulations can be complex and requires judgement to assess possible associated risks, particularly in relation to the Group's cross-border operations and transactions.

The net deferred income tax assets as at 30 June 2025 consisted of the following:

The net deferred tax liability balance of US$5,025 thousand (31 December 2024: net deferred tax liability of US$2,088 thousand; 30 June 2024: net deferred tax asset of US$5,914 thousand) includes net deferred tax liabilities totaling US$720 thousand (31 December 2024: net deferred tax assets totaling US$1,799 thousand; 30 June 2024: net deferred tax assets totaling US$9,166 thousand) related to temporary differences of the Group's two major subsidiaries in Ukraine, with the remaining balance reflecting deferred tax liabilities of subsidiaries outside of Ukraine. The net deferred tax assets in Ukraine are net of a total allowance of US$34,090 thousand (31 December 2024 US$22,956 thousand; 30 June 2024: US$20,324 thousand). The allowance increased by US$11,134 thousand as at 30 June 2025 and the allowances recorded in the comparative periods were affected by the appreciation of the local currency in Ukraine. The recoverability of these deferred tax assets depends on the level of taxable profits realised by the two subsidiaries in future periods and the duration of the unwind of the temporary differences. Due to the material uncertainty in terms of the Group's going concern, the relevant period for the recovery of the recognised net balance of deferred tax assets has been aligned to the period of the going concern assessment.

Temporary differences of US$701,792 thousand, including the allowances mentioned above, have not been recognised as at 30 June 2025 (December 2024: US$491,909 thousand). Of those temporary differences, the vast majority relates to impairment losses of US$145,699 thousand, US$67,699 thousand and US$175,088 thousand recorded as at 30 June 2025, 31 December 2024 and 31 December 2022 respectively. In addition to these temporary differences, US$115,694 thousand relate to provisions for legal disputes recorded in Ukraine as at 31 December 2023. The remaining balance of US$195,474 thousand (31 December 2024: US$133,429 thousand; 30 June 2024: US$112,779 thousand) predominantly relates to temporary differences for which allowances for recognised deferred tax assets have been recorded.

The level of taxable profits in Ukraine depends on many factors, such as the volatility in the global iron pellet market and foreign exchange rate changes, but also on the implications of the ongoing war in Ukraine, such as the potential interruption of power supply and the unavailability of the required logistics network.

BEPS - Pillar Two

The Group is in the scope of the BEPS Pillar Two Model Rules as the consolidated revenues for the financial years 2024, 2022 and 2021 were above the threshold set by the OECD rules.

The Group makes use of the temporary exception issued by the IASB in May 2023 in respect of the accounting requirements for deferred taxes under IAS 12. As a result, the Group does neither recognise nor disclose any information on deferred tax assets and liabilities related to Pillar Two income taxes in its interim condensed consolidated financial statements for the six month period ended 30 June 2025, which is consistent with the application during the comparative financial year 2024.

Based on the BEPS Pillar Two Global Anti-Base Erosion ("GloBE") Model Rules, the parent company of the Group, Ferrexpo plc with its tax domicile in Switzerland, is the Ultimate Parent Entity ("UPE") and, as a result, the enacted legislation in Switzerland is most relevant for the Group. On 22 December 2023, the Swiss government enacted the Pillar Two income taxes legislation, which came into force on 1 January 2024 and provided for the Qualifying Domestic Minimum Top-up Tax ("QDMTT"). On 4 September 2024, the Swiss government decided to implement the Income Inclusion Rule ("IIR") as of 1 January 2025, whereas the implementation of the Undertaxed Profits Rule ("UTPR") is still postponed.

Although the Group's effective tax rate for the financial year 2025 is expected to be well above the minimum tax rate of 15.0%, there are two jurisdictions where the Group is operating with enacted statutory tax rates below the minimum tax rate of 15.0% set under the BEPS Pillar Two Model Rules. As a result of the legislation enacted in Switzerland, the Group's subsidiaries in Switzerland are potentially subject to the QDMTT for taxable profits from the financial year 2025 and those of the Group's subsidiary in the U.A.E. (Dubai) are potentially subject to the QDMTT in the U.A.E., which has been implemented, effective for financial years starting on or after 1 January 2025.

There was no significant impact from the QDMTT, the IIR and the UTPR under the BEPS Pillar Two GloBE Model Rules on the Group's income tax expense and did therefore did not have a significant effect on the Group's effective tax rate as at 30 June 2025. The total effect from top-up tax within the Group amounts to US$192 thousand in connection to QDMTT in the U.A.E.

Taking also into account the implementation of the QDMTT in Switzerland and in the U.A.E. and the IIR in Switzerland, the Group's future effective tax rate, before any special items included in the profit before tax for the period and the income tax expense, is expected to be in a range of 18.0% to 20.0%. The Group's effective tax rate is also dependent on the volatility in the global iron ore pellet market and on foreign exchange rate movements, primarily between the Ukrainian hryvnia and the US dollar, and any one-off events, such as impairment losses that might not be tax deductible in some jurisdictions. As mentioned above, the Group has had special items in the past that had a significant impact on the effective tax rate.

Note 9: Earnings per share and dividends paid and proposed

Basic earnings per share ("EPS") are calculated by dividing the net profit for the period attributable to ordinary equity shareholders of Ferrexpo plc by the weighted average number of Ordinary Shares.

Diluted earnings per share are calculated by adjusting the weighted average number of Ordinary Shares in issue on the assumption of conversion of all potentially dilutive Ordinary Shares. All share awards are potentially dilutive and have been considered in the calculation of diluted earnings per share.

The basic number of ordinary shares is calculated by subtracting the weighted average of shares held in treasury and employee benefit trust reserves from the total number of ordinary shares in issue.

Dividends proposed and paid

In view of the continued unpredictable situation in Ukraine, no interim dividends were proposed for the six-month period ended 30 June 2025 as at the date of the approval of these interim condensed consolidated financial statements. Considering the provisions of the Companies Act 2006 and relevant thin capitalisation rules, the total available distributable reserves of Ferrexpo plc would be approximately US$77,500 thousand for the remainder of the financial year 2025.

Future distributable reserves at the Ferrexpo plc level are also dependent on the payment of dividends by the subsidiaries to the respective parent companies within the Group. Further to that, the distributable profits at subsidiaries' level are subject to potential impairment losses and provisions for legal disputes to be or already recorded in the respective stand-alone statutory financial statements as a result of uncertainties in Ukraine in connection with the ongoing war and legal disputes. Certain Group companies are currently restricted from paying dividends outside of Ukraine due to Ukrainian currency control measures imposed under Martial Law. Furthermore, the uncertainties related to the political environment and the independence of the legal system and other circumstances facing the Group (see Note 19 Commitments, contingencies and legal disputes) could also have a negative impact on Ferrexpo plc's ability and potential for future dividend payments. Further to that, an outflow of funds in connection with ongoing legal disputes would have an adverse impact on the Group's available liquidity for potential future dividend payments, despite a considerable amount of distributable profits of one of the Group's subsidiary in Ukraine.

As disclosed in Note 2 Summary of material accounting policies, a nationalisation of 49.5% of shares in Ferrexpo Poltava Mining ("FPM") or a transfer of 49.5% of the corporate rights in FPM to Ukraine's Asset Recovery and Management Agency ("ARMA") for management of these corporate rights will also have an impact on the equity attributable to the shareholders of Ferrexpo plc and its future distributable reserves.