Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore products, reports production results for the first quarter to the end of March 2025 (“the quarter" or “2Q” or “2Q 2025”).
Updates
- Ferrexpo remains committed to the safety and wellbeing of its workforce and the Group continues to take extensive measures to protect employees, their families, and local communities.
- At the end of May 2025, the Group reported a rolling 12-month LTIFR of 0.70, which was above the historic five-year trailing average of 0.52. Zero workplace fatalities have been reported for more than four years.
- Formal written notifications of decisions not to refund VAT from the Ukrainian tax authorities are being received on a monthly basis, typically two months after the reporting month. From January to April 2025 the amount of VAT refunds refused is US$31 million.
- Due to the ongoing suspension of VAT refunds and the resulting reduction in financial liquidity, the Group has been forced to downscale operations from two to one pelletising line and also to reduce the production of high-grade concentrate.
- As a result, total commercial production for the quarter was 1.3 million tonnes, 40% lower than the 2.1 million tonnes achieved in the first quarter (the highest production achieved in any quarter since the full-scale invasion in February 2022).
- The Group demonstrated agility and flexibility however, as it continued to benefit from strong demand for its high-grade low-alumina concentrate from customers in China, representing over a third-of its product mix for the first two quarters of 2025.
- The Group has worked extensively to lower its costs to remain financially viable. This includes reducing working time for employees, cuts in procurement of goods services and a suspension of all non-essential CapEx, overheads and CSR spending.
Summary production statistics
| (tonnes, unless otherwise stated) | Fe Grade | 2Q 2025 | 1Q 2025 | Change | 6M 2025 | 6M 2024 | Change |
| Total commercial production | 1,267,668 | 2,125,467 | -40.4% | 3,393,135 | 3,727,336 | -9.0% | |
| Total pellet production | 821,882 | 1,347,749 | -39.0% | 2,169,631 | 3,297,441 | -34.2% | |
| DR pellets (FDP) | 67% | 0 | 81,787 | - | 81,787 | 162,645 | -49.7% |
| Ferrexpo premium pellets | 65% | 821,882 | 1,265,962 | -35.1% | 2,087,844 | 3,134,796 | -33.4% |
| Commercial concentrate | 67% | 445,786 | 777,718 | -42.7% | 1,223,504 | 429,865 | 184.6% |
Commenting on the Group’s performance, Lucio Genovese, Interim Executive Chair, said:
“The strong momentum at the start of the year, including our best quarterly production since the full-scale invasion in February 2022, was significantly curtailed in the second quarter as we started to experience the full impact of the Ukrainian tax authorities’ decisions to suspend the refund of VAT to our Ukrainian subsidiaries. During the second quarter, due to the financial impact of the continued non-receipt of VAT refunds, we were only able to achieve 1.3 million tonnes of commercial production, forty percent lower compared to the previous quarter. Despite a weaker iron ore pellet market, we were able to significantly pivot our production mix and benefit from strong demand in China for our high-grade low-alumina iron ore concentrates. During the first six months of 2025 concentrate sales represented 36% of our production mix, three times more than in the same period a year ago. In the challenging operating environment and iron ore market, it is pleasing that we were able to be so agile, and benefit from the demand for high-grade concentrate products.
Lower iron ore prices and lower production, have, however, weighed on margins. This has been exacerbated by higher prices for raw materials such as gas and electricity. Throughout the second quarter the Group worked extensively to lower its cost base to remain financially viable. This includes placing approximately 37% of employees on reduced working time or on furlough, cuts in procurement of goods and services and a suspension of all non-essential CapEx, CSR and humanitarian spending. In tandem, all efforts and representations are underway with the respective authorities and government bodies in Ukraine and internationally to try to resolve the VAT refund suspension. I am grateful to all our colleagues for their efforts and contributions during this challenging time.
At the end of June, 738 colleagues are serving in the Armed Forces of Ukraine, more than at any time since the full-scale invasion in February 2022. During the period we also welcomed more colleagues back to our communities as veterans, a total 186 so far, of whom 98 have returned to the workplace.”
Link to full PDF version of this release: click here
For further information, please contact:
Ferrexpo:
Nick Bias
[email protected]
+44 (0)7733 177 831
Tavistock:
Jos Simson / Gareth Tredway
[email protected]
+44 (0)7899 870 450 / +44 (0)7785 974 264
About Ferrexpo:
About Ferrexpo: Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and a listing in the equity shares commercial companies category on the London Stock Exchange (ticker FXPO) and a constituent of the FTSE 250 and FTSE4Good indices. The Group produces high grade iron ore pellets, which are a premium product for the global steel industry and enable reduced carbon emissions and increased productivity for steelmakers when converted into steel, compared to more commonly traded forms of iron ore. Ferrexpo’s operations have been supplying the global steel industry for over 50 years. Before Russia’s full-scale invasion of Ukraine in February 2022, the Group was the world’s third largest exporter of pellets. The Group has a global customer base comprising of premium steel mills around the world. For further information, please visit www.ferrexpo.com.