Ferrexpo PLC on Thursday said the company struggled during its first full financial year operating in the face of the war in Ukraine.
Executive Chair Lucio Genovese commented: ‘Although the war is now in its third year, the 2023 financial year represents the first full year that we operated during a time of war. The challenges that we continue to face cannot be understated.’
In the year to December 31, the Baar, Switzerland-based producer of iron ore pellets for lower carbon and green steel swung to a pretax loss of $68.4 million in 2023 from a profit of $338.7 the year before.
Revenue fell 48% to $651.8 million from $1.25 billion, and the company paid no dividend for the 2023 calendar year, down from 13.2 US cents per share.
An interim dividend of 3.3c proposed in January was withdrawn in February following subsequent and unexpected events in Ukraine relating to a claim against one of the group’s Ukrainian subsidiaries.
Performance was hampered by a 5% reduction in average iron ore prices and the ongoing conflict in Ukraine which resulted in lower sales due to various logistical constraints.
The company also recorded a provision of $131 million to cover potential costs associated with two legal cases relating to its subsidiaries and debt claimed by LLC PCC Kysen, which Ferrexpo is challenging.
‘We believe that the various claims are without merit and that we have strong legal arguments to vigorously defend ourselves in court,’ Ferrexpo stated.
‘During 2023, the group has become more agile and flexible, and was able to deliver to its closest customers. Whilst the group cannot with any certainty offer production and cost guidance for 2024, there are some opportunities to enhance efficiencies, production and sales,’ the company said.
Looking ahead, iron ore prices are forecasted to increase in 2024 as supply constraints continue alongside a recovery in demand from China and Europe.
Ferrexpo shares were up 0.4% to 46.41 pence each in London on Thursday morning.
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