Ferrexpo PLC (LSE:FXPO), the iron ore pellet producer, is benefiting from a 23% increase in quarterly production after setting up a second pelletiser, analysts at Liberum revealed.
Operations, which take place in central Ukraine, have been hindered over the last year due to Russia’s invasion.
Setting up the new machine will lift operations to around 40% of the company’s total capacity.
“It is promising to see the improvements in production with the second pelletising line on and that Ukraine’s power systems have managed to weather the relentless attacks from Russia,” analysts at the UK bank added.
Production rose by 59% to 2.1Mt in the first half, most of which was sold, Liberum revealed.
However, exports are currently constrained as Russia is limiting access to shipping routes at the Black Sea.
“It is unclear if grain will have access to the Black Sea, as Russia has not renewed the agreement, or rail to Europe, as several EU nations are pushing back on grain imports,” the analysts added.
Liberum targets a 220p share price for the stock and rates it a ‘buy’.
Ferrexpo shares dropped by 4.4% on Thursday, having opened at just over 92p.