Ferrexpo plc, a mining company with major assets in Ukraine, produced 4 million 567.168 thousand tons of pellets in January-September this year, up 41.9% year-on-year (3 million 218.273 thousand tons).
According to a press release on Monday, Ferrexpo produced 1 million 269,727 thousand tons of pellets in the third quarter of this year, down 14.4% from the previous quarter (1 million 483,468 thousand tons).
At the same time, the total production of commercial products (pellets and iron ore concentrate) in the first nine months of 2014 increased by 47.5% compared to the same period in 2023, to 5 million 125.034 thousand tons from 3 million 474.860 thousand tons. In particular, the production of commercial concentrate amounted to 557.866 thousand tons against 256.587 thousand tons in January-September 2023.
In addition, it is specified that the company, in particular, produced 326.168 thousand tons of DR pellets in the first nine months of 2014 (it did not produce any in the first nine months of 2013), 3 million 780.610 thousand tons of premium pellets and 460.390 thousand tons of other pellets.
The press release notes that during the quarter, the Group successfully operated one or two pelletizing lines (out of four), with a focus on producing higher quality products. DR pellets production continued during the third quarter, with a total of three deliveries to two customers.
Commenting on the Group’s performance, Lucio Genovese, Interim Executive Chairman, stated that the third quarter was a very challenging operational and macroeconomic environment for the company.
“As we emphasized in our interim results, the requirement to import 80% of our electricity from our western neighbors remains in place, and the resulting high tariffs continue to have a negative impact on our costs. The situation is further complicated by higher shipping rates and additional costs for war risk insurance,” Genovese said.
According to him, to mitigate the pressure on profitability, the group’s strategy was to focus on selling higher quality iron ore products to customers in close geographical proximity. This involved expanding the customer base and selling premium DR pellets in the MENA region.
The top manager emphasized that the ability to quickly adapt to modern challenges is a testament to the flexibility built into the operating model. This allowed the company to slightly reduce the impact of both the aforementioned factors and lower iron ore prices, when the fall in the 65% Fe benchmark price briefly tested price support levels of $100/tonne during the quarter, bottoming out at levels last seen in 2022.
At the same time, Genovese emphasized some positive changes in the market at the end of the reporting period: prices began to recover amid improved sentiment caused by the announcement of economic stimulus measures in China.
For his part, Group CFO Nikolay Kladiev noted that the combined effect of much lower iron ore prices and higher production costs put significant pressure on earnings in the third quarter.
“The high electricity tariffs that I pointed out in the interim period continue to grow and increase our C1 costs compared to the initial period. This year we also continued to see higher freight rates and additional war risk insurance premiums. In response, we have sought to contain costs wherever possible and manage our cash position, which remained at around $100 million at the end of the third quarter,” explained the CFO.
He also said that in the last days of September, Chinese stimulus measures, including the lifting of restrictions on home purchases, provided long-awaited support for iron ore prices.
“The pessimism about iron ore prices seems to have subsided for now, but the recent volatility in the third quarter does not provide any assurance that prices will remain at this level or improve further. We will continue to maintain a vigilant approach to our financial and operational performance for the remainder of the year,” Kladiev concluded.
As reported earlier, Ferrexpo produced 3.845 million tons of pellets in 2023, down 36.5% from 2022.
Ferrexpo owns a 100% stake in Yeristovo Mining, 99.9% in Bilanivsky GOK and 100% in Poltava Mining.
Ferrexpo, a mining company with assets in Ukraine, increased its total sales of iron ore products by 85% year-on-year to 3.8 million tons in January-June this year.
According to the company’s interim report, out of 3.8 million tons, 1.8 million tons were exported through Ukrainian Black Sea ports.
Total commercial production in the first six months of 2024 increased by 75% to 3.7 million tons, including 3.3 million tons of pellets and 0.4 million tons of commercial concentrate.
C1’s production cost in 1H2024 increased to $79/tonne due to higher energy costs, expansion of mining activities, maintenance and repairs, partially offset by the positive effect of currency devaluation and cost-saving measures, the report explains.
It also notes that due to difficulties with electricity supply, the company is addressing this issue. At the same time, electricity costs in June increased by about $11/tonne at C1’s cost compared to the previous month. “C1 Group’s costs increased to $78.8/tonne in H1 2024 due to higher electricity prices offset by a slight devaluation of the hryvnia and the effect of a more favorable fixed exchange rate and increased production volumes,” the report explains.
Total distribution expenses in the reporting period increased to $148 million compared to $74 million in the first half of the previous year due to sales growth. And it is noted that maritime logistics routes are usually the cheapest and most efficient way to deliver the group’s products to its customers. As a result, sea sales increased by 1.7 million tons to 2.1 million tons in the first half of 2024 compared to 0.4 million tons in the same period of 2023.
In 1H2024, Ferrexpo reduced its capex by 5% year-on-year to $55 million from $58 million as a result of a 64.2% increase in revenue to $548.535 million from $334.010 million. EBITDA increased by 24.1% to $79.043 million from $63.685 million. Cash at the end of the first half of this year amounted to $115.131 million compared to $134.903 million at the end of June 2023.
In January-June 2024, Ferrexpo doubled its net profit compared to the same period last year to $55.490 million from $27.009 million. Pre-tax profit for the period amounted to $75.671 million, while in January-June 2023 it was $35.446 million.
In 2023, Ferrexpo reduced its capital investments by 37.1% to $101.247 million compared to $161.010 million in 2022 and $361 million in 2021.
Ferrexpo is an iron ore company with assets in Ukraine. Ferrexpo owns 100% of shares in Poltava Mining, 100% of shares in Yeristovo Mining and 99.9% of shares in Bilanivsky Mining.
Ferrexpo plc, a mining company with major assets in Ukraine, produced 3 million 297,441 thousand tons of pellets in January-June this year, up 67.6% year-on-year (1.967 million tons).
According to a press release on Monday, Ferrexpo produced 1 million 483,468 thousand tons of pellets in the second quarter of this year, down 18.2% from the previous quarter (1 million 813,973 thousand tons).
At the same time, the total production of commercial products (pellets and iron ore concentrate) in the first half of this year increased by 75.3% compared to the same period in 2023, to 3 million 727.336 million tons from 2.126 million tons. In particular, the production of saleable concentrate amounted to 429.865 thousand tons compared to 160 thousand tons in January-June 2023.
Commenting on the group’s performance, Interim Executive Chairman Lucio Genovese pointed to strong production results for the first six months of 2024, up 83% compared to the same reporting period in 2023 and up 75% compared to the first half of last year.
“This is our best result since the start of the full-scale invasion of Ukraine in February 2022. During the quarter, access to the Black Sea shipping corridor allowed us to continue shipping from Ukrainian ports. It is estimated that over 800 vessels, including 90 carrying ferrous metals, have safely passed through the corridor since it opened in late 2023. An increase in the number of shipowners willing to charter vessels to Ukrainian ports has led to improved availability, but freight rates and insurance premiums remain high not only for passage to Ukraine but also through the Red Sea,” Genovese said.
He also stated that other price pressure factors continued to increase in the second quarter, especially electricity prices. Attacks on energy production and transmission infrastructure have significantly reduced Ukraine’s domestic energy supply. Mr. Genovese added that Ferrexpo had started looking for alternative energy from Ukraine’s European neighbors in advance, which has so far resulted in minimal disruption to its operations.
“So far, we believe that the level of risk is acceptable given the ongoing war in Ukraine. We will continue to utilize all available export capacity to ensure that the interests of all stakeholders are supported, while maintaining labor levels to increase production, generate taxes and royalties for the government and continue our humanitarian activities,” the acting CEO summarized.
According to the press release, the group successfully operated two and sometimes three pelletizing lines (out of four) during the quarter, changing product quality depending on customer demand and expanding logistics capabilities. With the variable capacity of each pelletizing line, total production for the quarter amounted to 1 million 672,506 thousand tons, including 1 million 483,468 thousand tons of pellets and 189,038 thousand tons of concentrate.
DR pellet production resumed during the quarter. The Group’s nearly completed press filtration complex has improved the physical strength and chemical quality of pellets.
Group CFO Nikolay Kladiev noted that during January-June this year, the company quickly brought previously idle capacities back into operation, thanks to renewed access to customers from the Middle East, North Africa and Asia, which led to an improvement in the cash conversion cycle.
“While we took advantage of the opportunity to produce, export and sell more, the higher iron ore prices we benefited from in the first quarter did not carry over into the second quarter. This, combined with higher electricity prices, resulted in lower margins as we approached the end of the second quarter. However, we maintained our cash position, even as we invested in capex projects aimed at maintaining resilience and improving efficiency,” the CFO stated.
As reported, Ferrexpo produced 3.845 million tons of pellets in 2023, down 36.5% from 2022.
Ferrexpo owns a 100% stake in Yeristovo Mining, 99.9% in Bilanivsky GOK and 100% in Poltava Mining.
Ferrexpo plc, a mining company with major assets in Ukraine, and Salzgitter Flachstahl GmbH, a subsidiary of German steel company Salzgitter AG, have announced that they will strengthen their cooperation.
According to a stock exchange announcement, the companies signed a memorandum of understanding for the supply of direct reduced iron (DRI) pellets for the production of low-carbon steel.
It is specified that the memorandum on the use of pellets in SALCOS (Salzgitter Low CO2-Steelmaking), a production facility of Salzgitter, provides for the implementation of a decarbonization program, joint development of strategies for the use of raw materials within environmentally friendly supply chains.
“We have agreed on the terms of our cooperation for the future. Ferrexpo’s DR pellets can significantly reduce emissions in steel production under the SALCOS program,” explained Jaroslawa Blonska, Acting Marketing Director at Ferrexpo.
Gerd Baresh, Technical Director of Salzgitter Flachstahl GmbH, expressed his hope for intensified cooperation in the context of the SALCOS program: “This agreement will help us reduce carbon emissions in our supply chains and stimulate the production of environmentally friendly steel.”
The SALCOS program is expected to be technically completed by 2033.
Ferrexpo is an iron ore company with assets in Ukraine. Ferrexpo owns 100% of shares in Poltava Mining, 100% of shares in Yeristovo Mining and 99.9% of shares in Bilanivsky Mining.
Ferrexpo plc, a mining company with major assets in Ukraine, produced 3.814 million tonnes of pellets in January-March this year, up twice year-on-year (0.901 million tonnes) and 2.9 times more than in the previous quarter (0.627 million tonnes).
“Our operations delivered exceptional results in the first quarter, with total production up 203% quarter-on-quarter to over two million tonnes of iron ore pellets and concentrate. This is our best quarterly result since the full-scale invasion of Ukraine,” Executive Chairman Lucio Genovese said in a release on Tuesday.
It is specified that the total production of commercial products (pellets and iron ore concentrate) in the first quarter of this year amounted to 2.054 million tons, which is 2.1 times higher than in the first quarter of 2023 and 3 times higher than in the previous quarter. In particular, the production of saleable concentrate in January-March 2024 amounted to 241 thousand tons, compared to 53 thousand tons in January-March 2023 and 50 thousand tons in October-December 2023.
Genovese noted that Ferrexpo was able to export products from Ukrainian ports again during the quarter, which allowed it to supply larger volumes to Europe and resume sales to customers in the Middle East and North Africa and Asia.
According to him, the company is currently seeing an increase in the conscription of its employees: 669 Ferrexpo employees are serving in the army, which is the highest figure since the start of the full-scale invasion, while 67 employees have returned and a veterans’ reintegration program is underway.
“While we consider the level of risk acceptable given the ongoing war in Ukraine, we will continue to utilize all available export capacity to ensure that the interests of all stakeholders are supported,” Genovese concluded.
The Group also successfully operated two and sometimes three pelletizing lines (out of four) during the quarter, changing product quality depending on customer demand and expanding logistics capabilities.
Total sales for the quarter amounted to 1.992 million tons, producing only pellets with an iron content of 65%.
As reported, Ferrexpo produced 3.845 million tons of pellets in 2023, down 36.5% from 2022.
Ferrexpo owns a 100% stake in Yeristovo Mining, 99.9% in Bilanivsky GOK and 100% in Poltava Mining.
The company ended 2023 with a net loss of $84.8 million compared to a net profit of $220.0 million in 2022. Revenue for 2023 fell by 47.8% to $651.8 million, and EBITDA by 83% to $130.2 million.
Ferrexpo plc, a mining company with assets in Ukraine, produced 3.845 million tonnes of pellets in 2023, down 36.5% from 6.053 million tonnes in 2022, due to the fact that 2022 included a period of full-scale production before the Russian invasion of Ukraine.
According to the company’s announcement on Thursday, pellet production in the fourth quarter of 2023 fell by half compared to the previous quarter to 0.627 million tons, but this is 50.4% more than in the fourth quarter of 2022.
It is noted that in 2023, only premium pellets with an iron content of 65% were produced, while direct reduced iron pellets (DRI, 67% iron) and pellets with an iron content of 62% were not produced.
In addition, it is specified that the total production volume includes 50 thousand pellets produced in the fourth quarter from third-party concentrate.
“Even with the onset of winter, we were able to operate one and sometimes two of our four pellet production lines to meet our reduced export capacity and continue to supply premium products to our premium customers,” Interim Executive Chairman Lucio Genovese said in the release.
Speaking about the past year, the company notes the deaths of 14 employees who served in the Armed Forces of Ukraine, which increased the total number of employees killed since the beginning of the Russian invasion in 2022 to 34. It is specified that 754 of our employees are currently serving in the Armed Forces of Ukraine.
It is indicated that the company continues to retain most of its employees, despite the fact that it was forced to significantly reduce production. This, together with rising logistics costs in the absence of access to Black Sea export routes, has led to a decline in profitability.
However, the report notes that Ukraine’s recent success in opening Black Sea export corridors has made it possible to resume shipping from certain ports.
“When the time is right, Ferrexpo plans to launch an additional pellet production line and resume exports via this route, provided it is safe and cost-effective,” the release said.
In addition, it is noted that iron ore prices rose by more than 20% in the fourth quarter, thanks to China’s support for more steel-intensive sectors of its economy, and continued to hold at this level until the New Year.
“We are also seeing the first signs of a pick-up in pellet demand in Europe. Together, these factors can support our large fixed cost base and higher logistics costs. In my view, the improved demand and higher prices bode well for Ferrexpo for the year ahead,” Genovese concluded.
It is noted that the group’s net cash position, including minor adjustments, at the end of the year was approximately $109 million compared to $106 million a year earlier, with minimal lease obligations and no debt.
Ferrexpo owns 100% of Yeristovo Mining, 99.9% of Bilanivsky GOK and 100% of Poltava Mining.
In the first half of 2023, Ferréxpo cut its net profit threefold to $27.01 million, while revenue fell 2.8 times to $334.01 million, and its EBITDA fell 7.6 times to $63.64 million.
