TIDMFXPO
RNS Number : 7242O
Ferrexpo PLC
05 October 2023
5 October 2023
Ferrexpo plc
("Ferrexpo" or the "Company" or the "Group")
Production Report for 3Q 2023
Ferrexpo plc (LSE: FXPO) , producer of premium iron ore pellets
for the transition to lower carbon and green steel, is pleased to
report production results for the third quarter to the end of
September 2023 ("the quarter" or "3Q" or "3Q 2023").
Commenting on the results, Lucio Genovese , Interim Executive
Chair, said: "It is pleasing to report that our performance during
the quarter exceeded our expectations and that we were able to
operate up to two of our four pellet lines. Our strategy to move
early and right-size our business, so that we are more responsive
to ever changing circumstances, is working. Contrary to the
prevailing market pessimism, iron ore prices strengthened over the
quarter; a supportive factor given the higher logistics costs we
are experiencing. Despite the challenging rail logistics and sea
ports capacity available, we have continued to export premium
products and service the needs of our premium European customers.
This achievement is once again, testament to the resilience and
commitment of our workforce, who are operating in exceptionally
challenging circumstances.
We have noted over the last few months how various initiatives
focused on Ukraine's post-war reconstruction are gaining momentum.
This is especially the case for the iron ore and steel sector.
Several ideas are under discussion among leaders across the value
chain, with broad support of international finance institutions,
trade bodies and governments and multi-laterals. While the future
holds much potential, today during a time of war, it is not
possible to understate how challenging it is to operate our
business. This is especially the case as we head into the winter
season, when energy infrastructure is vulnerable to disruption. We
have deliberately focused on building pellet production during 3Q
to mitigate risks in the months ahead.
It is with great sadness that I must announce that 33 of our
employees serving in the Ukrainian Armed Forces have died. Each of
these brave soldiers has their own story, over half of them had
partners, half of them children. They all had careers at Ferrexpo,
including as electricians, mechanics, drill rig operators and pit
supervisors.
At present, 739 members of our workforce are currently serving
in the Ukrainian Armed Forces, 50 have been demobilised and
returned as veterans, 30 of whom have returned to work. We continue
to provide support for all these courageous employees and their
families through our humanitarian programme that also extends
further afield, including aid to the Kherson Region following the
blowing up of the Nova Kakhovka Dam.
Highlights
-- The safety and wellbeing of the workforce is the highest
priority, and the Group continues to take extensive measures to
protect all employees, their families, and local communities.
-- Ferrexpo continues to produce, transport and sell its
products despite a challenging environment in Ukraine.
-- At the end of September 2023, the Group reported a rolling 12
month LTIFR of 0.27, below the historic five year trailing average
of 0.69.
-- The Group has successfully operated between one and two
pelletising lines (out of four) during the quarter, alternating
product quality depending on demand from customers and available
logistics routes.
-- With variable, yet stable production at different times from
each of the two pelletiser lines in 3Q, total iron ore pellet
production was 1,251 million tonnes, 17% higher than 2Q.
-- The focus on production of higher grade pellets continued
during the period, all grading 65% Fe or above.
-- For the remainder of the year, the Group intends to operate
between one and two pelletising lines, assuming no further material
changes to the operating environment and logistics availability in
Ukraine.
-- Certain legal challenges against the Group and certain senior
management personnel of Ferrexpo Poltava Mining ("FPM") continue to
progress through the Ukrainian courts. In a recent court hearing
concerning claims regarding the sale of waste products by FPM,
which the Group continues to believe are without merit, the Chair
of the FPM Management Board was detained with bail set at a very
high amount. An appeal has been lodged against this decision and
the Group will provide an update to the market as and when
appropriate.
Summary production statistics Q3 2023 and 9M 2023
Fe Grade 3Q 2023 2Q 2023 1Q 2023 9M 2023
(kt) (kt) Change (kt) (kt)
----------------------------- ---------- --------- --------- -------- --------- ---------
Total commercial production
(pellets and commercial concentrate) 1,349 1,172 +15% 954 3,475
Total pellet production 1,251 1,066 +17% 901 3,218
Pellet production comprised
of:
o Direct Reduction
Pellets 67% 0 0 - 0 -
o Ferrexpo Premium
Pellets 65% 1,251 1,066 +17% 901 3,218
o Ferrexpo Basic Pellets 62% 0 0 - 0 -
Commercial concentrate
production 67% 98 106 -8% 54 257
----------------------------- ---------- --------- --------- -------- --------- ---------
Contact:
For further information, please contact:
Ferrexpo:
+44 (0)207 389 8305 / +44 (0)7733
Nick Bias n.bias@ferrexpo.ch 177 831
Tavistock:
Jos Simson +44 (0)207 920 3150 / +44 (0)7899
Gareth Tredway ferrexpo@tavistock.co.uk 870 450
About Ferrexpo:
Ferrexpo is a Swiss headquartered iron ore company with assets
in Ukraine and a premium listing on the London Stock Exchange in
the FTSE 250 index (ticker FXPO). The Group produces high grade
iron ore pellets, which are a premium product for the global steel
industry and enable reduced carbon emissions and increased
productivity for steelmakers when the Group's iron ore pellets are
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 invasion of
Ukraine in February 2022, the Group was the world's third largest
exporter of pellets to the global steel industry. The Group has a
global customer base comprising of premium steel mills around the
world, which includes steel mills in Austria, Germany, Japan, South
Korea, Taiwan, China, Slovakia, the Czech Republic, Turkey, Vietnam
and America. For further information, please visit www.ferrexpo.com
.
Notes:
**Due to the ongoing war in Ukraine, and the multiple challenges
that this places on production, it is not considered appropriate at
the current time to compare quarterly and half yearly production
numbers to same period last year, i.e. 3Q 2023 to 3Q 2022 and 9M
2023 to 9M 2022, because the circumstances in which they are
produced are different. Even withstanding seasonal anomalies, it is
believed that at the present time, investors and other readers will
have a better understanding of how the Company is performing if the
latest quarterly and half yearly production is compared to the
previous period (i.e. 3Q 2023 to 2Q 2023). Hence, since 2Q 2023 it
has been decided to present production reports in this time format
and until further notice.
Please note that numbers may not add up due to rounding and all
numbers contained herein may be subject to change.
The Company will report fourth quarter and full year production
results for the 12 months ended 31 December 2023 on 11 January
2024.
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END
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