Ferrexpo PLC (LSE:FXPO), the FTSE 250-listed Ukrainian iron ore producer, reported lower production in the past quarter and has been notified that eight of its workers have died whilst serving in the armed forces defending the country against Russia’s invasion.
In an update covering operations in the third quarter, the company said it has continued to operate throughout the war in Ukraine, though iron ore pellet production declined further in the past three months.
Output of 0.8mln tonnes in the third quarter represented a year-on-year decrease of 68% as understandable logistical constraints required production to be curtailed. In the second quarter, production had been down 27%.
"Having continued to operate throughout the war in Ukraine, which is a credit to our operating and marketing teams, the third quarter of 2022 saw an additional constraint on the Ukrainian railway network with the increase of shipments of grain during the annual harvest season, further to the other demands and constraints facing logistics providers in Ukraine at the present time,” said chief executive Jim North.
Sales of 1.0mln tonnes were made in the quarter, down 65% year on year, with sales tonnages exceeding production as operations draw down on existing stockpiles in Ukraine.
Currently just one of its four pelletiser lines is in operation, it said, in line with the volume of exports it expects to make. “We continue to operate in accordance with the volume of sales that we can achieve at the present time, and expect to increase production once we have further clarity on logistics corridors.
“The group continues to adapt to its present circumstances, as demonstrated by our increased focus on producing direct reduction pellets, with this higher grade product typically receiving an additional premium in the market," said North.