Ferrexpo reported a 31% decline in first-half revenues on Wednesday, to $936m, as a result of lower production and tighter market conditions.
The FTSE 250 precious metals miner said profit after tax for the six months ended 30 June declined 88% to $82m, reflecting the realisation of an impairment of $254m during the period.
Underlying EBITDA decreased 44% to $486m, reflecting higher costs, primarily driven by lower production volumes, rising global inflation and energy prices.
The group said it remained in a net cash position of $172m, comprising $177m of cash and cash equivalents and “minimal debt” as of 30 June.
Capital investment of $102m was made during the period, with the group continuing to invest in projects delivering near term value.
“12 months ago, we spoke in our interim results announcement of an exciting future ahead for the Ferrexpo business, and whilst this positive growth story remains in the group’s plans, today we are focused on supporting the people and communities of Ukraine following more than 150 days of Russia’s continued invasion,” said non-executive chair Lucio Genovese.
“The results announced today reflect an unprecedented period in the history of Ukraine, and Ferrexpo, and should be viewed as a result derived through the strength and determination of Ferrexpo’s workforce in Ukraine and those involved in facilitating the export of the group’s products.
“Having previously shown resilience during the global Covid-19 pandemic in 2020 and 2021, the Group’s operational teams managed to produce 4.8 million tonnes of iron ore pellets in the first half, and a financial result that is in many ways comparable to historic periods, despite a deterioration in global iron ore markets.”
Genovese said that despite the ongoing conflict in Ukraine, the group was continuing to invest in the future – advancing both near-term projects to completion such as its newly-completed medium and fine crushing plant, to the development of longer term projects such as development stripping activities at the group’s third mine – Belanovo, which had continued despite the current environment.
“The group’s major capital investment programme, the Wave 1 Expansion Project, which will add a further three million tonnes of annual pellet production, remains paused, but will recommence once the conflict risk facing the Group subsides.”
At 0907 BST, shares in Ferrexpo were up 1.82% at 145.5p.
Reporting by Josh White at Sharecast.com.
