TIDMFXPO
RNS Number : 3222Z
Ferrexpo PLC
11 January 2024
11 January 2024
Ferrexpo plc
("Ferrexpo" or the "Company" or the "Group")
Production Report for 4Q 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 fourth quarter and full year to
the end of December 2023 ("the quarter" or "4Q" or "4Q 2023" and
"FY2023").
Commenting on the results, Lucio Genovese , Interim Executive
Chair, said: "Throughout the year I have maintained that it is the
resilience and commitment of our workforce that has ensured our
assets remain operational. Once again, due to their steadfast
determination that today we are reporting fourth quarter iron ore
production of 677 thousand tonnes, and a total 4.1 million tonnes
for the year.
Even with winter setting in, we have been able to operate one,
sometimes two, of our four pellet lines, to match the reduced
export capacity available to us, and continue supplying premium
products to our premium customers. Because our business is adaptive
to change, during the quarter we were able to alter our production
mix to match our customers' needs and produce high grade pellets as
well as pellet feed, whilst also treating material from a third
party. In view of the hugely challenging situation that we faced
during the past year, I believe that this is an exceptional
performance and I am proud of our collective achievements.
Reflecting back on 2023, it is with great sadness that 14 of our
employees serving in the Ukrainian Armed Forces have died, bringing
the total to 34 since the Russian invasion began in 2022. At
present, 754 of our colleagues are serving in the Ukrainian Armed
Forces.
As the end of a second year of the war approaches the way we
manage our business also continues to change. Since the full scale
invasion we have continued to retain the majority of our workforce,
despite being forced to significantly reduce our production. This
has resulted in the business carrying significant fixed costs.
Furthermore, a lack of access to Black Sea export routes meant that
we have incurred higher logistics costs than in previous years and
were also limited in our ability to service our MENA and Asian
customers..
Ukraine's recent success in opening up Black Sea export
corridors has permitted some to recommence shipping out of certain
ports. When the time is right, Ferrexpo plans to start up an
additional pellet line and resume exports via this route, provided
it is safe and cost effective. It is also encouraging to note that
iron ore prices strengthened over 20% during the final quarter,
driven by China's support for the more steel-intensive sectors of
its economy, and have continued to hold up well into the New Year.
We also note the early signs of an uptick in pellet demand in
Europe. These factors combined could be supportive of our large
fixed cost base and higher logistics costs. In my opinion, improved
demand and higher prices bode well for the year ahead for
Ferrexpo."
Highlights
-- Ferrexpo is committed to the safety and wellbeing of the
workforce 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 December 2023, the Group reported a rolling 12
month LTIFR of 0.39, below the historic five year trailing average
of 0.69. For the third consecutive year zero fatalities were
reported.
-- 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 4Q, total iron ore pellet
production was 577,140 tonnes from own ore, 54% lower than 3Q due
to logistic constraints and lower market demand in the early part
of the quarter.
-- Total pellet and commercial concentrate production for the
full year was 4,151,703 tonnes, 33% lower than the previous year,
primarily because the 2022 year included a period of
full-production before the full scale invasion of Ukraine commenced
on 24 February 2022.
-- The focus on production of higher grade pellets continued
during the period, all graded 65% Fe or above.
-- Group net cash position, subject to minor final year-end
adjustments, of approximately US$109 million as of 31 December 2023
(31 December 2022: US$106 million), with minimal lease obligations
and no debt.
Summary production statistics Q4 2023 and FY2023 (kt)
Grade 4Q 2023 3Q 2023 Change FY 2023 FY 2022 Change
Total commercial production
(pellets and commercial
concentrate) 677 1,349 -50% 4,152 6,177 -33%
-------- -------- ------- -------- -------- -------
Total pellet production 627 1,251 -50% 3,845 6,053 -36%
------ -------- -------- ------- -------- -------- -------
Direct reduction pellets 67% - - - - 353 -
------ -------- -------- ------- -------- -------- -------
Ferrexpo premium pellets 65% 577 1,251 -54% 3,795 5,700 -37%
------ -------- -------- ------- -------- -------- -------
Ferrexpo basic pellets 62% - - - - - -
------ -------- -------- ------- -------- -------- -------
Third party pellets
from concentrate 65% 50 - - 50 - -
------ -------- -------- ------- -------- -------- -------
Commercial concentrate
production 67% 50 98 -49% 307 124 +147%
------ -------- -------- ------- -------- -------- -------
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 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:
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 Preliminary Financial Results for the
year ended 2023 on 13 March 2024.
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END
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