8 July 2023

Ferrexpo's production report based on the results of the company's activities during the second quarter and first half of 2023 has been released.

In the second quarter of 2023, the total production of Ferrexpo amounted to 1,172 thousand tons, which is 23% more than in the previous quarter.

In general, in the first half of the current year, production amounted to 2.1 million tons, which is 56% lower than in the same period of the previous year, but 56% more than in the second half of 2022, when production volumes were significantly affected by electricity supply problems due to Russian missile attacks of Ukrainian energy infrastructure.

At the same time, the total volume of sales in the reporting quarter increased by 45% compared to the previous reporting period and amounted to 1.2 million tons (for the first half of 2023 – 2.1 million tons, 15% more than in the second half of 2022).

The biggest problem for the group remains logistical difficulties, due to which the group is not able to increase the volume of exports and, accordingly, the production of iron ore pellets. Ferrexpo continues to export products by rail and through Danube river ports. The current capacity of these routes (although gradually increasing) does not allow the company to significantly increase its export volumes.

As a result, Ferrexpo is currently operating at about 35-40% of its capacity, the company restarted operations of the second pellet production line in March (total capacity – four lines), but production on the second line is currently unstable. In the company's plans for the current year – to provide for two lines operation at full capacity (it will mean 50% capacity utilization).

Taking into account the level of global iron ore prices, as well as the estimated production cost of Ferrexpo, according to our expectations, the company's activity in the first half of the year was profitable. We remind you that general financial standing of Ferrexpo is good, the main positive point is the strong balance sheet.

The cash on hand 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.

The analysis of the financial standing of Ferrexpo according to the Y2022 financial report is available at the link.

The company's financial statements for the first half of 2023 will be published on August 2.