Ferrexpo, a mining company with assets in Ukraine, reduced its capital investments by 43.1% to $58 million in January-June this year, compared to $102 million in the first half of last year.
According to the company’s semi-annual report on Wednesday, capex for the first half of 2023 includes $27 million for maintenance and modernization capex and expansion capex of $31 million across the group.
It is noted that given the operational and logistical constraints due to Russia’s invasion of Ukraine, the group has maintained its levels of sustaining capex investment and is seeking to reduce investment in expansion capex projects, particularly those expected to generate returns in the medium to long term.
Overall in H1-2023, this included $17 million in capitalized stripping works to support future production growth; $7 million in expansion commitments, including the press filter complex; and $2 million in the development of the Belanovsky mine.
Due to the war, the group has suspended significant funding for Wave 1 Expansion projects (Wave 1 Expansion – a combination of mining, concentrating and pelletizing investment projects that will produce an additional 3 million tons of pellets), intending to resume investment once the hostilities and/or risks to the group have ceased.
In addition, the group continues to maintain its net cash position and balance its operational and financial targets. It is clarified that the group’s net cash position has improved from $106 million as at December 31, 2022 to $131 million as at June 30, 2023.
The group has no confirmed debt facilities or unconfirmed trade finance facilities, there are insignificant group debt facilities. The group’s gross debt balance at June 30, 2023 was $4 million compared to $7 million at December 31, 2022.
In addition, it is stated that the group has regularly received VAT refunds during the first half of the 2023 financial year, including overdue balances. Meanwhile, at the end of June-2023, VAT receivables from tax authorities amounted to $47.111 million, compared to $88.762 million at the end of 2022 and $107.552 million at the end of June-2022.
“The overdue VAT balance of $47.149 million at the end of December 31, 2022 was fully collected in January 2023.However, future refunds depend on the situation in Ukraine and how the country is going to cope with state budget constraints as a result of the ongoing war,” the report said.
Ferrexpo is an iron ore company with assets in Ukraine.
Ferrexpo owns 100% of Poltava GOK PJSC, 100% of Yeristovskiy GOK LLC and 99.9% of Belanovskiy GOK LLC.
British Ferrexpo plc, which controls in Ukraine, in particular, Poltava and Yeristovo mining and processing plants, increased capital investments by 75.2% in 2021 compared to 2020, to $361 million from $206 million.
According to an annual report released by the company on Tuesday, in 2021, the capital investment per tonne of produced products was $160/tonne, while in 2020 this figure was $109/tonne.
At the same time, it is specified that last year, following the projects to increase the capacity of the processing plant (in 2020), the company began to modernize and increase the capacity of its granulator (pelletizer).
Of the $361 million, maintenance and capital expenditures for modernization totaled $113 million in 2021 (2020 – $103 million), including investments in all of Ferrexpo’s core business units. At the same time, investments were directed to the group’s concentrator and granulator, including an increase in capacity – the costs amounted to $111 million (in 2020 – $34.3 million). In addition, Poltava Mining has invested $34 million in a press filtration plant, which is scheduled for completion in 2022.
Additional capex areas are stripping for $69 million in 2021 (2020 – $14 million) and $6 million invested in infrastructure, development and exploration of the Belanovo field (Belanovo Mining), Haleschynske and Pivnichne fields (2020 – $6 million).
In addition, 2022 marks the 15th anniversary of the listing on the London Stock Exchange. During this time, the company has invested more than $3 billion in production, becoming the world’s third largest exporter of iron ore pellets, and is also starting to supply products with a higher iron content (67% Fe) to global markets.
The Group continues to invest and develop its assets, the report states.
After the completion of the initial upgrade of the pelletizing lines, it is planned to enter the next phase of growth, which will increase production of pellets by 3 million tonnes over the next three years. In October 2021, a decision was approved to focus on ore processing and high iron product operations while maximizing production and customer satisfaction.
At the same time, the company intends in the future to increase the total volume of ore production from 125 million tonnes in 2020 to about 265 million tonnes, spending $180 million on this. It is planned to invest $240 million to increase the capacity of crushing equipment and beneficiation to more than 45 million tonnes – contracts have already been signed with Metso and Weir Minerals.
In addition, to increase the capacity of one granulator line (out of four) by 3 million tonnes, investments will amount to $181 million.
It is planned to spend $28 million to solve logistics issues for transporting additional 3 million tonnes of pellets, which will require increasing the capacity of its port and purchasing additional wagons.
At the same time, the report states that investments to increase production by about 25% of existing capacities have been temporarily suspended by the group due to the war in Ukraine, but projects will be resumed after the situation in the country is clarified.
The growth of capital investments in Ukraine in July-September 2021 compared to the same period in 2020 amounted to 18.7%, while in April-June the growth was 17.1%, and in January-March there was a decline in capital investments at the level of 9.5%, the State Statistics Service said.According to the service, in the third quarter of this year, UAH 331.666 billion of capital investments were spent (excluding the temporarily occupied Crimea, Sevastopol and the territories of Luhansk and Donetsk regions).The growth of capital investments in the first nine months of this year compared to the same period last year amounted to 9.7%, the State Statistics Service said.In the regional context, a decrease in capital investments in the third quarter of 2021 from the third quarter of 2020 was recorded in Luhansk (by 6.7%) and Kherson (by 5.7%) regions.Capital investments in July-September 2021 compared to July-September 2020 increased in Lviv (by 83.6%), Ivano-Frankivsk (by 80.5%), Kyiv (by 80.4%), Chernivtsi (by 59%), Vinnytsia (42.8%), Cherkasy (41.5%), Zakarpattia (35%), Ternopil (32.1%), Odesa (27.1%), Rivne (25.2%), Kharkiv (by 23.8%), Chernihiv (by 18.5%), Volyn (by 16.7%), Zaporizhia (by 17.8%), Dnipropetrovsk (by 11.6%), Kirovohrad (10.9%), Donetsk (10.3%), Mykolaiv (10.1%), Khmelnytsky (12%) regions and Kyiv (5.6%).
The volume of investments in real estate in Kyiv amounted to the equivalent of $30.7 million in May 2021, which is 12% more than in April of the same year, Director of Blagovist Real Estate Agency (Kyiv) Olena Biberova told Interfax-Ukraine.
“The market for the sale and purchase of real estate in Kyiv continues to demonstrate activity. Supply and demand are balanced. At the same time, the new supply that appears on the market is more expensive [by 10-15%] than similar properties that were put up for sale earlier,” she said.
According to Biberova, the most affordable option purchased in May was a one-room apartment of 28 square meters on Novhorodska Street (Solomiansky district), which was bought for $25,000. The most expensive property sold in May was a house with an area of 610 square meters in Lisnyky village (Kyiv-Sviatoshynsky district) purchased for $1 million.
According to the real estate agency, the segment up to $50,000 in May took 14% of the total number of transactions. These were mainly deals with one-, two-room apartments. For example, a one-room apartment of 32 square meters on Bastionna Street (Pechersky district) was bought for $45,000 and a one-room apartment with an area of 41 square meters on Radchenka Street (Solomiansky district) – for $50,000. House with an area of 60 square meters and with a land plot of 21 acres in Vytachiv village (Obukhiv district) was bought for $42,000.
In the segment from $50,000 to $100,000, some 45% of transactions were carried out. It is dominated by two, three-room apartments in Solomiansky, Podilsky, Darnytsky districts of Kyiv in new buildings (residential complexes Quartet, Fayna Town, etc.).
On Hnata Yury Street (Sviatoshynsky district) a two-room apartment with an area of 53 square meters was bought for $52,000, on Academician Williams Street (Holosiyivsky district, residential complex Liko-Hrad) a one-room apartment with an area of 46 square meters was bought for $70,000; and on Kudriashova Street (Solomiansky district) a one-room apartment with an area of 46 square meters was bought for $100,000.
According to Biberova, the price category from $100,000 to $250,000 in May was 35%. The favorites in this category were objects in new houses in Holosiyivsky and Pechersky districts. For example, a one-room apartment with an area of 45 square meters was sold for $102,000 on Bulvarno-Kudriavska Street (Shevchenkivsky district, residential complex Yaroslaviv Hrad), a two-room apartment with an area of 70 square meters on Yevhena Konovaltsia Street (Pechersky district) was sold for $182,000, and a three-room apartment with an area of 110 square meters on Yevhena Konovaltsia Street (Pechersky district) was sold for $245,000. House with an area of 250 square meters in Hatne village (Kyiv-Sviatoshynsky district) was bought for $160,000.
The price category from $250,000 in May is represented by 6% of the total volume of transactions. On Panasa Myrnoho Street (Pechersky district) a five-room apartment with an area of 180 square meters was bought for $262,000. A four-room apartment with an area of 190 square meters on Heroes of Stalingrad Street (Obolonsky district) was bought for $310,000. Non-residential premises with an area of 84 square meters on Mykhaila Drahomyrova Street (Pechersky district) were bought for $775,000.
Blagovist Real Estate Agency, part of the First Realty Group corporation, was established in 1993.
Today, there are eight agency offices in Kyiv, with which about 500 professional real estate consultants cooperate.
Metinvest B.V. (the Netherlands), the parent company of the Metinvest mining and metallurgical group, in January-March this year reduced capital investments by 1% compared to the same period last year, to $ 147 million from $ 148 million.
The unaudited consolidated financial results for the first quarter of 2021 show that strategic investment declined 37% year-on-year as a result of the ongoing revision of the technology strategy and the completion of some key projects in 2020, while maintenance project investment increased by 32%, which brought its share in total capital investments to 30% and 70%, respectively (47% and 53% in the first quarter of 2020).
At the same time, Metinvest continued to implement the following key strategic projects: the construction of a cyclical flow technology at Pivnichny and Inhulets GOKs (completion of work at both GOKs is expected by the end of 2021), the construction of an air separation unit at Illich Steel Plant (detailed engineering documentation has been completed). Metinvest has also launched a project for thickening waste enrichment at Pivnichny GOK to reduce waste transportation costs and the cost of servicing pumping equipment at slurry pumping stations. The group continued the construction of new block No. 11 at the mine of the recently consolidated Pokrovske mine directorate to maintain production volumes.
“Despite the completion of the main work within the largest environmental project in the history of Ukraine – the reconstruction of the sinter plant at Illich Steel Mill, environmental issues remain a priority for the group,” the report emphasizes.
Thus, other environmental projects in the first quarter of 2021 included the reconstruction of the gas cleaning facilities of the foundry and the bunker rack of blast furnaces No. 4 and No. 5 at Illich Steel Mill, the reconstruction of the gas cleaning system of oxygen converters at Azovstal and the replacement of the gas cleaning equipment of the Lurgi 552-A roasting furnace at Pivnichny GOK.
Metinvest is a vertically integrated group of mining and metallurgical enterprises. The group’s enterprises are located mainly in Donetsk, Luhansk, Zaporizhia and Dnipropetrovsk regions.
The main shareholders of the holding are the SCM Group (71.24%) and Smart-Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
JSC Ukrzaliznytsia in 2021 plans to allocate almost three times more funds for renovation, overhaul, modernization of rolling stock and construction of infrastructure compared to 2020.
According to the press service of the company, the capital investment of the enterprise in 2021 should amount to UAH 27.2 billion (UAH 9.7 billion in 2020). At the same time, 55% of this amount is Ukrzaliznytsia’s own funds, 31% are investors’ funds, 14% is planned to be received from the state budget.
Ukrzaliznytsia counts on state support in implementing these plans. Since investments in the renewal of infrastructure must be comprehensive and systemic, so that in the future they return to the state budget in the form of profit, it added.
As reported, Ukrzaliznytsia intends to increase capital investments to UAH 41 billion in 2023.
In 2019, Ukrzaliznytsia increased its net profit by 14.7 times, to UAH 2.988 billion (UAH 203.85 million in 2018). EBITDA increased by 6% compared to the previous year, to UAH 17.3 billion.
