Ferrexpo PLC on Thursday said it continues to make, transport and sell its products despite the ongoing war in Ukraine, but that production dropped in its latest quarter and year.
The Swiss iron ore pellet producer with assets in Ukraine said its net cash position at December 31 was approximately $109 million, up from $106 million one year prior.
Ferrexpo said total iron ore pellet production from iron ore in the fourth quarter fell 54% to 577,140 tonnes from 1.3 million tonnes in the third quarter. Production for 2023 was 3.8 million tonnes, down 37% from 5.7 million tonnes the previous year.
Total commercial production, comprising pellets and commercial concentrate, dropped 50% to 677,000 tonnes in the fourth quarter from 1.3 million tonnes in the third.
Annual production decreased 33% year on year to 4.2 million tonnes from 6.2 million. However, it said this was mainly because 2022 included a period of full production prior to Russia’s invasion of Ukraine that February.
Ferrexpo said all pellets produced during the quarter were graded 65% iron or above.
‘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,’ said Interim Executive Chair Lucio Genovese.
He continued: ‘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.’
Genovese also said that Ferrexpo has incurred increased logistics costs due to a lack of access to Black Sea export routes. However, because of Ukraine’s ‘recent success’ in opening certain corridors in the area, Ferrexpo plans to start an extra pellet line and resume Black Sea exports ‘provided it is safe and cost effective’.
‘In my opinion, improved demand and higher prices bode well for the year ahead for Ferrexpo,’ he added.
Ferrexpo shares traded 5.4% lower at 77.10 pence on Thursday morning in London.
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