8 April 2023

In the first quarter of 2023, the total production of Ferrexpo was 954 thousand tons, which is 109% more than in the previous quarter, but 65% less than in the first quarter of 2022.

The total volume of production in the reporting quarter was close to the corresponding figure of the third quarter of 2022. The increase compared to the fourth quarter was primarily due to a significant improvement in the electricity supplies, which allowed the company to put into operation the second pellet production line at the end of February (the total production capacity is four lines, so at the moment the company can operate at up to 50% capacity).

We also note that after a significant decline throughout most of 2022, global iron ore prices have started to rise since November, which has a positive effect on Ferrexpo profitability (we estimate that Ferrexpo's operations in the first quarter of 2023 were profitable).

Sales of pellets in the reporting quarter were almost equal to production volumes, that is, the group's inventory almost did not change. Ferrexpo currently exports its products to European countries by rail and barges through the Danube ports.

As a reminder, by our estimation, financial standing of Ferrexpo remains good (please find our Y2022 financial statements analysis by the link).

The amount of cash in the company's balance sheet at the end of 2022 amounted to $113 million, with almost no loans or other forms of debt financing. With total assets of $1.354 billion, equity is $1.250 billion – the structure and quality of Ferrexpo's balance sheet remain very good.